Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
How the Federal Reserve Under Greenspan and Bernanke Caused the Housing Bubble and the Recession
Every administration from Jimmie Carter to GW Bush contributed to the housing bubble and the recession that followed its collapse. So did every Chairman of the Federal Reserve Board particularly Chairmen Greenspan and Bernanke. They were responsible for the housing bubble that caused the long-lasting recession when it burst. As we have noted on this site more than once, their support of the Community Reinvestment Act of 1977 was the principal cause of the housing bubble and the recession that followed when the bubble burst. Greenspan by his policy of low interest rates and both by their administration of the CRA.
CRA examinations are conducted by the Fed, the Fewderal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. But the Fed is clearly the dominant administrator. The law does not require the banks to make high-risk loans and in fact recites that they should require banks to make loans in a safe and sound manner. As the number of subprime loans and the number of defaults and foreclosures clearly show, the supervisory institutions actually condoned making loans that violated customary good banking practices. ...
The CRA was based on a widely believed myth that banks were denying blacks mortgage loans because of their race. There was no evidence of that. It was a conclusion drawn from the fact that fewer mortgage loans were being made in poor neighborhoods where in fact there were a smaller percentage of qualified borrowers than in richer neighborhoods. The relaxed standards that followed for making loans resulted in a huge number of subprime mortgages and encouraged speculation in building houses that caused the housing bubble. When the bubble burst, it caused a world-wide financial crisis and ushered in the recession. An unintended consequence was that it made communist and other left-wing organizations like ACORN rich by enabling them to blackmail banks and force the banks to hire them as mortgage agents. ...
Will the trend toward CNG continue?
CNG (Compressed Natural Gas) is increasingly being substituted for gasoline and diesel oil as a motor fuel. Though the number of vehicles that have switched is still tiny, compared to the numbers running gasoline and diesel oil, the trend is clear. Commercial fleets of trucks and buses have been switching. The number of available CNG filling stations has been increasing. But will the trend continue?
It is possible to predict that a continuing disparity between the prices of natural gas and crude oil will cause demand for CNG to increase. Take gasoline, for example. Gasoline first became more expensive than CNG in March 2006 when both were priced at $2.34 per gallon. Although gasoline was briefly priced lower than CNG in November 2008, due to a worldwide recession, by the end of March 2009 gasoline had again become more expensive than CNG. At the end of May 2012, the price differential was $3.58 for a gallon of gasoline and $1.72 for the equivalent in CNG (calculated as the price of natural gas to commercial consumers plus 70¢), as shown in the graph below:
Op-ed in the Ripon Forum
My op-ed analyzing the 2012 Virginia elections was just published online in the Ripon Forum. The paper copy will be sent out next week. One important aspect of the Virginia presidential election which I discuss in the op-ed is the candidacy of anti-free trade candidate Virgil Goode (Conservative Party).
One wild card in the Virginia presidential contest is Constitution Party candidate (and former VA 5th District Congressman) Virgil Goode. Goode's platform is broadly conservative, although his position against free trade agreements has the potential to draw support from voters dissatisfied with the trade actions and positions of both parties. Goode appears poised to qualify for ballot access, as his campaign claimed on August 1, 2012 to have collected more than 18 thousand signatures, nearly twice the ten thousand required under Virginia law.
Goode has the potential to spoil Romney's electoral prospects. He retains a base of support in the 5th district, although he is relatively unknown in other parts of the state. Polls have put Goode at 5 to 9 percent of the statewide vote if included on the ballot...
"Deficit Spending Doesn't Work, Balanced Trade Does" - we're published in today's American Thinker
Here is a selection:
To read the entire article, go to http://www.americanthinker.com/2012/08/deficit_spending_doesnt_work_balancing_trade_does.html
Romney: we do not have to accept "a huge and seemingly perpetual trade deficit with China"
Fox News reports:
Spain cuts its trade deficit the hard way
European shares hit new highs a few days ago on the news that Spain's trade deficit was down 31.2% in June compared to June a year earlier. How did Spain do it? The chart below gives a clue:
Obama, Romney miss the elephant in the room -- Charles Campbell nails it in today's Baltimore Sun
In an op ed in today's Baltimore Sun, retired Gulf Oil executive Charles Campbell nails it (Obama, Romney miss the elephant in the room: The cause of our economic woes is faulty trade policy, but the presidential candidates offer no solutions). He begins:
Another new low for US-China trade
On August 9, the Census Department published the trade data for June, the 29th consecutive month in which the US merchandise trade deficit with China has worsened and the 20th consecutive month that it has set a record low. The US merchandise trade deficit with China was $307 billion over the 12 months ending in June 2012, as shown in the graph below:
Is America Slouching Into Fascism Under Both Democrats and Republicans ?
It is a measure of the strength of the Communist movement that it got the media and most academics to accept the notion that fascism is a right wing movement. The important political difference between Communism and Fascism is that Communist parties wherever they are located see themselves as part of an international Marxist socialist movement whereas Fascist parties are single-country socialist movements, initially at least. Trotsky’s complaint against the Stalinist wing of the party, which got him killed, was that the latter was insufficiently international. Communism is his view was and should be a worldwide revolutionary movement.
The word Nazi is a German contraction of the name Adolph Hitler gave his political party, the National Socialist German Workers’ Party. The word Fascist is derived from the name Mussolini gave his Italian national socialist party. Its symbol was the fasces, a Roman symbol of authority. Why have the media always subscribed to the myth that Nazis and Fascists were rightist political movements? Was it because to identify them as socialists would have been to reveal how close to the Communists they really were? They did not want workers to realize that the Nazis and Fascists were socialist parties. Getting workers worldwide to believe the lie that fascism was a rightist movement was a great Communist political achievement. ...
Journal of Economic Literature:
Atlantic Economic Journal: