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Progressives’ new ‘state bank’ as the rocky road to serfdom

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Why does a bank robber rob banks?

“Because that’s where the money is.”

Or so goes the legendary response by the infamous bank robber Willie Sutton (who later denied ever saying it).

So why is the new progressive Governor-Elect of New Jersey (a former Obama Administration Ambassador to Germany and Goldman Sachs executive named Phil Murphy) proposing a “state bank”?

Why, maybe that’s because taxpayers are where the money is?

Can Gov.-Elect Murphy Make a Go of His Public Bank? – NJ Spotlight

http://www.njspotlight.com/stories/17/11/12/can-gov-elect-murphy-make-a-go-of-his-public-bank/Gov.-elect Phil Murphy often told a story on the campaign trail about how, as a relative newcomer to statewide politics, few people in New Jersey had even heard of him before he jumped into this year’s governor’s race. After his victory last week, the same could be said about one of Murphy’s core fiscal-policy proposals — a plan to launch a state-run public bank in New Jersey. The type of financial institution envisioned by Murphy would take state-government funds now deposited in accounts with large commercial banks, including those based overseas, and use them to back low-interest loans that would serve the public’s interest in New Jersey, including student debt, infrastructure investments, and small-business lending.

New Jersey already has the third-highest state and local taxes in the nation (behind only its neighbor New York and nearby Connecticut), thanks to a double whammy in an income tax and high property taxes generally credited with supporting the largesse of generous salaries and benefits for legions of public-sector employees.

One problem is where that state bank will get its money. The progressive Governor-Elect Murphy declares, “That’s our money!” Yet there is no thought to returning it to overtaxed taxpayers — not when there’s votes to buy and a money pot whose bottom is not yet visible. Because when Murphy and his progressive do-gooder allies use the first-person plural pronoun, they are referring to the government and not the people.

As politicians in the bluest of the blue states learn that promising endless “free” stuff, particularly when it’s paid for by political opponents and disfavored constituencies, is a recipe for getting elected, perhaps attacking liberals and progressives for wanting to raise taxes will no longer be a winning campaign argument. Not when many voters are net recipients of government monies, meaning, they simply don’t pay taxes. However, a “state bank” could cause numerous undesirable effects beyond taxes to infinity, beyond encouraging inflation.

Consider how banks work, and then consider the very premise of Murphy’s “state bank” is that it would step in where greedy conventional for-profit banks supposedly fail “to serve the community.” The suspicion here is that the state bank will be giving “low-interest” loans to people or businesses which otherwise are not getting loans on the terms they want, or at all.

When you seize the money earned and saved by the homeowner with an 800 FICO score, to underwrite a loan for his deadbeat neighbor in foreclosure who’s got a 520 FICO score, you aren’t being generous or compassionate. You are creating a moral hazard, and an immoral condition.

The second problem arises from a fundamental misunderstanding of — no, it is a fundamental disregard for — how a conventional bank works. A bank makes loans, because it makes money off the interest. It must put the capital to use. However, there’s the risk of nonpayment, of borrower defaults. Banks “fail” when they suffer too many nonperforming loans. No one wants to talk about this, because it involves acknowledging that the collateral is bad, that the bank made a mistake, that it issued a mortgage worth more than the underlying collateral to a bad credit risk on even worse terms (like the infamous no-income-no-assets-no-problem mortgages).

The lesson of the last decade’s housing bubble and nonperforming mortgages (of which many still are on the books of the largest lenders) apparently is going to be ignored for as long as there is a large supply of “marks” available to shoulder the eventual burden. So we can expect that the New Jersey state bank — and its copycats in other states, of that you can be certain — will soon start making bad lending decisions to borrowers of either questionable credit risk or otherwise connected to various “social justice” initiatives.

Then, when the loans start to “go bad” and go into default, you can expect the state bank to start playing “winners and losers” when deciding whose collateral to go after. Your car dealership may be seized, while the marijuana farm may be allowed forbearance on its defaulted loan. And just think what mischief can be made by politically-connected local prosecutors who can use their “discretion” to choose whom to investigate and prosecute, all to serve a progressive political agenda whose singular goal is to transform the society.

Taxpayers across America should shudder at the thought of government-run banks. Because those banks would be deploying our capital, raised from taxes and from government debt, often sold to foreign bond buyers like the Russians and Chinese. But without the nasty profit motive — which in plain English also amounts to old-fashioned accountability to savings account depositors like you and me — to ensure loan officers only make loans most likely to be repaid, the state bank is likely to accomplish only three things.

A new set of winners: tomorrow’s sellers of assets at inflated prices due to the availability of new credit for car loans, home loans, college loans and small business loans, often with no regard for the terms or creditworthiness of the borrower (and perhaps little to no expectation of repayment).

A new set of losers: Since the premise of a state bank is, we are told, to serve the poor and often first-generation immigrants or members of traditionally-underserved “minority” communities, we can expect the debt and wrecked credit scores from defaulting loans to be shouldered by these same groups. Tomorrow’s college students may be in greater debt than the current generation’s. More people may end up renting, as bad credit is no guarantee of affordability against inflated and rising home prices.

The result? Another generation headed for practical indentured servitude. The difference? This time, the lender will be the government.

A second set of repeat losers: These will be the owners of anything which can be indirectly collateralized to cover those loans. We’re talking property owners and the middle-class income producers. Future tax streams can — and in all likelihood must — be “securitized” to cover delinquent loans.

Again, the party able to place liens on stressed property owners for unpaid taxes? The government.

The rich white guy ex-Goldman Sachs may be able to escape checking his privilege while playing Robin Hood. The reality is that he’s playing the Pied Piper, but only as long as he plays the tune called by his decidely unmerry band of progressive, envious knaves, rejects and scalawags who now threaten to turn New Jersey today — and your state tomorrow — into a land of serfs beholden to the do-gooder lords of the manor.

Economy

President Trump working with Congress to sanction Turkey

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President Trump working with Congress to sanction Turkey

In less than a week, Turkey has managed to draw the ire of most of the world, including most on Capitol Hill, as they move to eradicate Kurds and Christians in eastern Syria. Their invasion, coordinated with attacks by their Syrian al Qaeda proxies, have already caused turmoil, killed hundreds, and displaced hundreds of thousands.

Now, President Trump appears ready to follow through on his threat to “cripple Turkey’s economy” through sanctions.

The President has been criticized by many in both political parties following the White House announcement that we are withdrawing troops from the border region. What followed was such a quick response in the form of an all out Turkish invasion that it’s clear they’ve been planning this for some time.

Our EIC took to Twitter to push the President towards following through with his threat against Turkey should they cross the line. As he noted, they have clearly crossed the line.

Reports of civilian deaths are mounting. It isn’t just the Kurds that Turkey and al Qaeda are targeting. Syriac Christians are in the crosshairs as well. The intense fighting seems to be focused on clearing out entire cities to make room for the millions of refugees the Turks currently hold. Instead of just taking out military targets from the Kurds, who Turkey believes to be terrorists, the invaders are wiping out the entire populations in cities and villages near the border.

Senator Lindsey Graham chimed in. Graham has been a Trump supporter, but broke from the White House over the Syrian withdrawal. Now, he’s voicing hope and alignment with the President’s sanction plans.

Turkish President Erdogan clearly lied to President Trump. It’s time to send them a clear message in response. Our troops may be coming home, but we can stop this bloodbath through sanctions. Cripple their economy, Mr. President.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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Democrats

Andrew Wilkow: Elizabeth Warren’s lack of real-world experience is why progressives love her

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Andrew Wilkow Elizabeth Warren

Elizabeth Warren is the current frontrunner for the Democratic nomination for president. I’ll admit, I never expected that to be the case until recently. I truly believed she would be in the middle of the pack before bowing out in favor of Bernie Sanders, Kamala Harris, or one of the other radical progressives who would take on Joe Biden. But I was wrong. She has surged into the lead and at this point, it’s her race to lose.

BlazeTV’s Andrew Wilkow explained her popularity among the progressives, and in doing so showed by I was unable to see her appeal. According to Wilkow, the difference between her and Hillary Clinton is that she’s a member of the elite academia, which progressives love. Her lack of real-world experience isn’t seen as the clear detraction that it should be. Instead, having lived in a theoretical bubble of feel-good progressive policy proposals gives her an advantage in the eyes of hyper-leftists.

In other words, she hasn’t had any real-world experience to burst her bubble, so she’s able to enact hypothetical ideas that are demonstrably bad without reality clouding her judgment. To the far-left, this makes her an ideal candidate.

How in the world is Elizabeth Warren leading in the Democratic polls? Andrew Wilkow breaks it all down for us in this eye-opening analysis for BlazeTV. She’s as detached from reality as her policy proposals, which is why the radicals adore her.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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Economy

Trump to farmers: ‘Buy more land and get bigger tractors’

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Trump to farmers Buy more land and get bigger tractors

President Trump announced today a “phase one” trade agreement with China. Part of the deal includes a dramatic increase in agricultural products to be sold to China, ramping up from around $16 billion worth per year at its highest historic mark to $40-$50 billion per year moving forward. Current levels are estimated at around $8 billion. While announcing it, the President said farmers should immediately “buy more land and get bigger tractors.”

The deal is expected to be written and signed in three to five weeks. It was negotiated on China’s behalf by Chinese Vice Premier Liu He.

Both economies have suffered through the trade war that started last year between the two biggest economies in the world. But pressure seems to have hit China harder as they are generally the exporter while America is more of an importer. The President’s goal of balancing out trade between the two countries prompted back-and-forth tariffs. This deal stops upcoming tariffs, at least temporarily.

Also included are intellectual property and financial services, two sticking points between the countries since long before President Trump took office.

Opinion

I’m hopeful, but I don’t trust China one bit. This stalls upcoming tariffs, but until it’s signed it’s still just a theory. Nevertheless, it’s a positive sign and a step in the right direction towards bringing back free trade as our national economic mantra.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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