Tuesday, July 31, 2007

Confronting Iran the Follow Up

Last week the Democrats had a spat over the proper way to approach countries like Iran. Each candidate felt that Bush's approach of isolation is wrong. First, each of the candidates unfortunately is wrong in their characterization of Bush's approach. If only the administration really did isolate Iran, then maybe we would get somewhere however we have held multiple high level meetings between envoys. Each have accomplish absolutely nothing.

There has however been a lot written about the subject. In my opinion the foremost expert on the subject is Dennis Ross

Not only do we not want to limit the means available for transforming
unacceptable or dangerous behaviors internationally, but when we say as a matter
of principle that we will not talk to certain states--or we set conditions that
exclude the possibility of such talks--we often make it harder to persuade
others in the international community that our posture is reasonable. We often
make ourselves the issue rather than the behavior of those regimes that deserve
Isolation is an important sanction in international relations. It
should be used when states engage in intolerable behaviors such as violating
basic international norms, providing support for terrorists, trying to subvert
their neighbors or engaging in genocidal behaviors...

Ross's point is a good one. Of course, we should be prepared to engage dangerous regimes but on our terms not for the sake of engagement. This was what Hillary Clinton tried to say though in my mind even she didn't go that far. Sending in envoys to feel out sociopaths is naive. Sociopaths manipulate plain and simple and any meeting will benefit them a lot more than us. Obama completely mischaracterized Reagan's position. He didn't meet with the Soviets until he was ready, until it was clear they couldn't keep up with the arm's race. Reagan didn't meet with the Soviets just for the sake of it.

This is how we should confront Iran, and lately more and more people are recognizing it. For instance, here is what Senator Kyl said...

"Through a careful strategy of divestment, smart sanctions and asset
freezing, international trade limits, and better targeting of Iran's leaders, we
can follow up on the existing discontent on the street," he said.
While no
one can predict the ultimate results, Kyl believed that tough sanctions and
divestment, coupled with a better targeted public diplomacy campaign aimed at
supporting the pro-democracy movement inside Iran, could have dramatic effects.
"The eventual result could be regime change," he said. "Nearer term,
pressure could cause policy shifts with the existing regime...

Kyl is right. This regime is teetering on the edge. They have one product, oil, that keeps them afloat, and we as a nation can and must pressure all companies that invest there. He is absolutely right. Had we all managed a similar strategy with Germany in the 1930's there may not have been a World War II.

Divesting from Iran is even hitting the college campus...

For example, Sen. Frank Lautenberg (D., N.J.), taking aim at pension systems, said:
“It is unconscionable . . . to permit investment . . . in companies that provide
revenues, advanced equipment and technology to countries that threaten our vital
security interests.” And presidential candidate Mitt Romney has called
private sector and state officials to divest from Iran and to “cut off
the resources [it] uses to fuel terror.” Peter Huessy, president of GeoStrategic
Analysis, a defense and national-security consulting business, puts a finer
point on it: “Tolerating investment in fanatic states like Iran intent on
killing us is nothing less than a policy of suicide.”

Once again, I encourage everyone to visit divestterror.org, to find out exactly which companies do business with Iran. I encourage everyone to write the state department to encourage more isolation of the regime, to pressure the UN for further sanctions even the sort of limp and weak sanctions that they are accustomed to, and I encourage everyone to find a way to remove embassies from Iran. By this three pronged approach we can bring this government down peacefully with no bombs...

Thursday, July 26, 2007

SB 1167 and My Favorite Reagan Quote

Today the Illinois Senate Passed SB 1167. This is a new version of a disastrous bill known as HB 4050. Because fraud is so pravalent in the mortgage industry, the politicians in Springfield felt they had to do something. This bill calls for in some cases that borrowers before they can close on a loan that they meet with a state certified representative to discuss the loan. While this may all sound good in theory, in practice it is not only an intrusion, but a looming disaster for all.

While HB 1167 hasn't been finalized here are the basics of HB 4050

HB 4050 is a pilot program in Cook County (Illinois) designed to protect
mortgage applicants from unscrupulous loan originators.
The pilot
program lasts four years.
HB 4050 was passed in July 2005 and became
Illinois state law January 1, 2006. It will not be implemented and
enforced until the physical database to compile and store data is completed,
HB 4050 applies to state-chartered loan originators (i.e. mortgage
brokers and local mortgage bankers). Therefore, federally-chartered banks
are exempt (i.e. Chase, National City, Fifth Third, Bank of America) from the
HB 4050 requires "High Risk" individuals to receive financial advice
from federally-approved financial counselors before completing a mortgage
The definition of "High Risk" is stated in the rules of the
law. These are summarized as follows:
Applicant FICO
score is less than 620, or
Applicant FICO score is between 621-650 and any
one of these conditions is true:
Subject property was financed within the
last 12 months
Mortgage product has an Interest Only feature
product is an ARM with an initial fixed period of 3 years or less
application does not require the verification of applicant's income
product contains a prepayment penalty
Mortgage product contains a negative
amortization feature (i.e. Option ARM)
Total points and fees payable by
borrower at, or before, closing exceeds 5% of the loan size
HB 4050 does not
apply to all of Cook County. It only applies to designated zip
codes. This is a map of
those zip codes
. We also created an overlay
of the pilot program with a map of areas in which mortgage fraud has

Some of you may have read my recent diary about Illinois High Cost and my favorite Reagan quote. The principle is the same here. On certain mortgages the government has decided that the consumer is not smart enough to make decisions on their own and so the government will step in and before the deal is finalized they will scrutinize the decision. Imagine if before you bought a car, you had to meet with a government sponsored counselor to make sure that car did in fact fit your needs. Imagine putting in any other product or service in place of a mortgage and see if that is something that you would stand for.

When HB 4050 passed, a great many banks simply decided not to lend in the areas affected. What this did was it drove real estate down in those areas. Just take a look at this chart...

60620 experienced a 43% drop in sales
60621 experienced a 25% drop in sales
60623 experienced a 57% drop in sales
60628 experienced a 15% drop in sales
60629 experienced a 63% drop in sales
60632 experienced a 34% drop in sales
60636 experienced a 41% drop in sales
60638 experienced a 54% drop in sales
60643 experienced a 49% drop in sales
60652 experienced a 43% drop in sales
Compared to September 2005, one year ago, sales were also down 45% in the target zip codes. So, we can say with near certainty that the plummet is not strictly seasonal. The breakdown by zip code:
60620 experienced a 28% drop in sales
60621 experienced a 37% drop in sales
60623 experienced a 61% drop in sales
60628 experienced a 17% drop in sales
60629 experienced a 70% drop in sales
60632 experienced a 54% drop in sales
60636 experienced a 1% drop in sales
60638 experienced a 65% drop in sales
60643 experienced a 49% drop in sales
60652 experienced a 41% drop in sales

As you can see each zip code affected by HB 4050 experienced a drop off in sales. HB 4050 was wrong on principle, however the government though it was wrong because it isolated certain zip codes, poor zip codes, and they thought this, and this only, was wrong. Look again at the sales figures for every zip code affected by HB 4050. Apparently the government wasn't satisfied with dropping off sales in a select few zip codes because the new law will cover the entire County of Cook. Now, if HB 4050 caused drops in every zip code it affected, what do you think will happen if there is a new law that does the same thing in the whole county?

Once again, my favorite Reagan quote applies, "the nine most dangerous words in the English language are 'I'm from the government and I'm here to help'". Yes, there is way too much fraud in the mortgage industry and it is a problem that can be catastrophic, however the answer is NOT for the government to step in and create even more bureaucracy to a process that is already insanely bureaucratic. Anyone who has gotten a mortgage probably remembers wanting to pull their hair out from all of the paperwork waiting and red tape. Now, the government wants to add yet another layer of bureaucracy to a process that usually drives people crazy as it is.

That's right. The government thinks most of you are too stupid or too unscrupulous to make your own decisions with your own mortgage. So, before you can make a decision, you need to meet with a counselor, for $300, and talk to them and explain yourself to them. Does this sound like the sort of liberty that the great Thomas Paine wanted to die for?

Friday, July 20, 2007

Confronting Iran

At the end of June the Iranian government suspended gas rations. Iran has the world's third largest oil reserves and yet despite that fact Iran imports about 50% of its petrol needs. The reason is that Iran sells gas at well below market price to its citizens. Anyone with any proficiency knows what happens when government, or anyone, sets artificial price ceilings. Thus, it should come as no surprise that Iran had to finally ration gas. I can only assume that the mullahs and their current mouthpiece, Mahmoud Ahmadinejad, set price ceilings as a way to bribe the citizenry so that they don't revolt while they commit anyone of their many other evil deeds upon them. What the mullahs can't get around is basic economic principles. If this country, with the third largest oil reserve, imports about half their own oil, and now they have to ration their gas, well then this is a government ripe to fall, especially with the right push.

Dick Morris has been writing about this for months. In this latest column he highlighted an interesting poll. It turns out that the Iranian poll arn not only overwhelmingly against nuclear development if that means further isolation, against supporting Iranian proxies like Hezbollah and Hamas, while 55% would recognize Israel if it meant restoring trade agreements. In fact, the people rebuke the regime itself by a margin of 61-27 and embrace democracy by 79-14. Clearly, there is a total disconnect between the regime itself and the people it governs.

He has highlighted a group called disinvestterror.org. Disinvest terror has been pushing the state pensions to disinvest from companies that currently do business with Iran. So far, they have succeeded in California, Florida and Ohio. Texas is also taking steps to do the same. Iran is already teetering on the edge of economic collapse. What would happen if a state like New York joined California, Florida and Ohio in disinvesting from any company that does business in Iran. If all fifty state pensions did like the current three, I believe the Iranian economy would finally tip over.

What this campaign needs is a grass roots effort. Ifeveryone reading this contacted their own state office to demand that their state go the way of Florida, Ohio and Texas than that would be a start. If everyone reading this visited the site disinvestterror.org to see other ways they could help, that would be even better. If this sort of economic isolation was combined with whatever limp sanctions the United Nations came up with it WOULD be devastating to the Iranian economy and just may make the regime fall.

Furthermore, this effort would need to be combined with an effort to support those groups that are themselves working to bring freedom and Democracy in Iran. A simple Google search of Iranian freedom finds many such groups, like this, and this. Movements to bring freedom to Iran are everywhere however they are weak and need help. The first thing they need is cash. I say this because I believe that there are conservatives everywhere organized and ready for a cause, and they all should be flushed with cash. I say this because there should be Conservatives everywhere that just recently were part of an effort to defeat the Senate Amnesty bill. Many of them swore that politicians and political parties were no longer going to get their money. In other words, their money is in need of a cause.

These efforts must be further combined with the State Department further isolating Iran. Rather than meeting to discuss Iraq, the Middle East, or anything else, our State Department should be encouraging allies to pull their Ambassadors in an effort to further isolate the regime.

These three things combined together has a legitimate chance of bringing the regime down peacefully. Many of us say that war is inevitable, but here is an opportunity to take down the regime peacefully and I hope everyone reading this sees the same opportunity to bring down this evil regime.

Thursday, July 19, 2007

Around the blogosphere

Michelle Malkin has a story that is a bit hard to believe, but maybe it is. Obama has a great idea for kindergarten education

Teddy Davis and Lindsey Ellerson Report: Sen. Barack Obama, D-Ill., told Planned
Parenthood Tuesday that sex education for kindergarteners, as long as it is
“age-appropriate,” is “the right thing to do.”

Redstate has an update on the continuing battle over the John Doe provision

Today, Democrats are
scrapping the "John Doe" provision from the Homeland Security
bill. The provision would protect Americans who report suspicious behavior. As
Rep. Pete King (R-NY) said, "This is a slap in the face of good citizens who do
their patriotic duty and come forward, and it caves in to radical Islamists

Bill Roggio updates the Taliban's Campaign in Pakistan

At least eight people
were killed and 26 wounded
in the suicide attack on the Police Training
College in the Northwest Frontier Province district of Hangu. The bomber drove
his explosive-laden car into the main gate of the training facility, Ten of
those wounded are said to be in critical condition, and the local hospital is
operating under emergency conditions, The News reported. Hangu borders North
Waziristan, where the Taliban have been waging campaign against the government

the left sees cynical posturing on Iraq

Well, you don't need to be an expert to know that the GOP is backed into
a September corner
. In theory, if Bush were a normal politician, he'd use
that as a pivot, blame the Iraqis and then start a withdrawal for which he'd
take credit. Nixon would have done it in a heartbeat. Of course, a normal
politician wouldn't find himself at 28% in the
and ignore what that's doing to
the party
he supposedly heads.

Bill Maher has nothing but kind word to George Bush at the Huffington Post

A common right-wing talking point is that we weren't in Iraq on 9/11 and they
still attacked us. Yes, but this "war" is a numbers game: before we invaded
Iraq, how many young Muslim men were ready to join up for a suicide mission
against the west? Some, but my guess is, not very many. But now? My guess is
very many. The exact opposite of what the president says is true: because we're
there, this shit is going to follow us home. You could probably make up a chart
with incidents and images on one side, and the number of terrorist recruits on
the other. The abuses at Abu Graib: 25,478 Muslim men decide to strap on the
suicide belt. Pictures of Saddam getting probed after he was captured: 962 vow
jihad on America. Hidatha: 6,089 more. Of course, I'm making these numbers up,
and we'll never know what the real numbers are, but every time I see on the news
pictures of our "surge" -- that is, pictures of American troops knocking some
Iraqi's door in, women wailing, men blindfolded on the ground while an infidel
writes on their neck in magic marker -- I think, yep, there's another X amount
of really, really pissed off Muslims who are going to do something about it.

once again though, nothing tops this video of Cody Paul. The kid is just plain sick and everyone needs to see this video...

My Number One Pick in Fantasy Football 2020

Check this kid out. I, frankly, broke a few ankles just watching him make cuts...



Sunday, July 15, 2007

Illinois High Cost, My favorite Reagan Quote, and Other Musings

My business, mortgages, is frankly hard enough without government interference. Between a plethora of rules and regulations created by the banks themselves and irrational borrowers, sellers, realtors and attorneys, I sometimes wonder how loans get closed at all, EVER. That's why what happened to my protege and his dealings with the Illinois high cost law was simply beyond the pale.
My protege is young mortgage broker, just out of college, that I have taken under my wing and trained. Over the last month and a half he has been carrying a very tough deal. It involves a marginal borrower trying to by a two unit property for investment purposes while that borrower puts down what the bank considers a minimal down payment. These factors together created a difficult loan and as a result it took my protege about a month and a half to complete it. He carried the loan all the way till its conclusion only to have a misquided Illinois law along with bank incompetence cut his legs out at its conclusion.

Illinois high cost, http://www.accessmylibrary.com/comsite5/bin/comsite5.pl?page=library&item_id=0286-10770341is an Illinois law that arbitrariy sets a ceiling upon the annual percentage rate that any first mortgage can have at just under 11%. Some of you maybe reading this and immediately say that 11% is plenty and no loan should charge higher or the broker is simply being greedy. Those that are would actually be wrong. The rate someone is charged on their mortgage is much more determined by their credit profile than by the overwhelming greed or lack thereof of their broker.
In other words, someone with excellent credit willing to put down 20% minimum on a home is going to have a much better rate than someone willing to put down nothing, with marginal credit on a four unit property. In fact, those factors are much more relevant than any greed or lack thereof on the part of their broker or banker.

I say this so that no one thinks that my protege got himself in trouble because they were looking to rip off their client. He wasn't. The rate from the beginning was near eleven percent. It never changed. The borrower knew it, understood it, and signed all of the necessary documents agreeing to it.

The term Clear to Close is an industry term indicating what all of you should infer. This is the last step before closing. This is the step that my protege got the loan to before Illinois High cost took over. The loan was sent to the closing department only to have the closing department determine at the end that the loan in its current form was ILLEGAL. In other words, the closing department determined that the loan exceeded Illinois high cost regulations. Yes, despite carrying it through the process, signing all the necessary documents, and most importantly having complete borrower approval, the rate on this loan was too high. Not too high for the borrower mind you, but rather for some bureaucrat in Springfield, Illinois.

The bank of course was not immune for criticism. The rate on this loan was the same at the end as it was in the beginning. Only an incompetent or cruel bank could possibly allow for such a determination to be made in the end rather than in the beginning. The situation is complicated by the fact that this loan is an adjustable rate mortgage meaning its rate was only fixed for the beginning of the process. As a result when the bank determines the APR, they ACTUALLY allow a software system to project future rates and let that play a determination in the APR.

To say that my protege was confused, frustrated, and angry would be an obvious understatement. Insult to injury was added when the bank finally figured out a way to do the loan. There was only one catch. The loan could only be done as long as my protege made absolutely nothing on it. As I was discussing further strategy, I couldn't resist throwing out partisan political rantings. I reminded my protege that such laws as Illinois High Cost, those that replace market principles with the musings of bureaucrats, are those normally associated with Democrats. He responded, "those damn Democrats". I don't think he really meant it, however he got a first hand lesson in what happens when big brother steps in and replaces the judgement of the market and profession itself with its own judgement.

I thought of this when I started again thinking of my favorite Ronald Reagan quote, "the nine most dangerous words in the English language are 'I'm from the government and I'm here to help'". This law was designed to protect the borrower from predatory lending, http://www.hud.gov/offices/hsg/sfh/pred/predlend.cfm however this particular borrower didn't need protection. They knew their situation and they were willing to accept the loan they got because it was the only one they qualified for. While some bureaucrat may have thought that the rate on this loan was higher than acceptable, the borrower, the one this bureaucrat thought needed protection, was perfectly happy to take it. Someone who had real compasssion for the little guy or maybe just wanted us to think they did created this law. They created this law to protect the individual from unscrupulous brokers.

What they didn't understand, what they never understood, is that mortgages work on logic. Borrowers get the loan they deserve. This borrower got the loan he deserved, or he would have if the government hadn't stepped in to protect him from himself appararently. Those words continued to filter in my mind, "the nine most dangerous words in the English language are, 'I'm from the government and I'm here to help'".

I thought of this quote when I thought of universal health care. Some other similar politician once again has real compassion or would like us to think they do when they promise "free" health care for all. Just as they protected the borrower right out of a loan that they wanted and frankly needed so to will they deliver free health care for all. Does anyone really think that government can get health care right anymore then they got this Illinois High Cost law? Beware folks when the government steps in, and they substitute the judgement of the market or the industry with their own. One day you too will be on the other side of your own Illinois High Cost Law.

Thursday, July 12, 2007

Failure is NOT an Option

I couldn't have said it better myself

Al Qaeda, the terrorist organization which attacked us in 1993, in 1998, in
2000, and in 2001 – and numerous other times – has the dual distinction of being
both the highest-profile enemy in the War on Terror, and enemy number one in
Iraq. Regardless of Speaker of the House Nancy “The Real War on Terror is in
Afghanistan” Pelosi’s apparent belief, along with many of her colleagues, that
the latter is untrue, the leaders of that terror network have said
otherwise, and have done so loudly and repeatedly.
Only last week,
Ayman al-Zawahiri (via video) spoke of the
vital role that Iraq currently plays as “the centerpiece of [al Qaeda’s]
anti-American fight.” It is safe, we think, to suppose that al-Zawahiri
may have a bit more knowledge of al Qaeda’s operations than Ms. Pelosi.
since the war’s very beginning, the calls have come – from retired military
officers, politicians, and activists – for a change in course in Iraq. And Ms.
Pelosi is determined to listen.

Amen, and again, if you want your voice heard, please go here.

Wednesday, July 11, 2007

Winning the War

Whatever problems Conservatives have with John McCain, courage isn't one of them. At risk to his political career he steadfastly defends a war growing more and more unpopular daily and a policy supported by fewer and fewer colleagues. The rest of the legislature is ready to give in when the going gets tough, but not McCain...

here is what he said on the Senate floor yesterday

In this light I would like to discuss America’s involvement in Iraq. The
final reinforcements needed to implement General Petraeus’ new
counter-insurgency strategy arrived several weeks ago, and last week I had the
opportunity to visit these troops in theatre. From what I saw and heard while
there, I believe that our military, in cooperation with the Iraqi security
forces, is making progress in a number of areas. I’d like to outline some of
their efforts, not to argue that these areas have suddenly become safe — they
have not — but to illustrate the progress that our military has achieved under
General Petraeus’s new strategy. The most dramatic advances have been made in
Anbar Province, a region that last year was widely believed to be lost to al
Qaeda. After an offensive by U.S. and Iraqi troops cleaned al Qaeda fighters out
of Ramadi and other areas of western Anbar, the province’s tribal sheikhs broke
formally with the terrorists and joined the coalition side. Ramadi, which just
months ago stood as Iraq’s most dangerous city, is now one of its safest.

In February, attacks in Ramadi averaged between 30 and 35; now many days
see no attacks at all — no gunfire, no IEDs, and no suicide bombings. In
Falluja, Iraqi police have established numerous stations and have divided the
city into gated districts, leading to a decline in violence. Local intelligence
tips have proliferated in the province, thousands of men are signing up for the
police and army, and the locals are taking the fight to al Qaeda. U.S.
commanders in Anbar attest that all 18 major tribes in the province are now on
board with the security plan, and they expect that a year from now the Iraqi
army and police could have total control of security in Ramadi. At that point,
they project, we could safely draw down American forces in the area. The Anbar
model is one that our military is attempting to replicate in other parts of
Iraq, with some real successes. A brigade of the 10th Mountain Division is
operating in the areas south of Baghdad, the belts around the capital which have
been havens for al Qaeda and other insurgents. All soldiers in the brigade are
“living forward,” and commanders report that the local sheikhs are increasingly
siding with the coalition against al Qaeda, the main enemy in that area of
operations. Southeast of Baghdad, the military is targeting al Qaeda in safe
havens they maintain along the Tigris River. These and other efforts are part of
Operation Phantom Thunder, a military operation intended to stop insurgents
present in the Baghdad belts from originating attacks in the capital

contrast that to Hillary Clinton and Robert Byrd

The American people have waited long enough for progress in Iraq. They have
waited long enough for the Iraqis to take responsibility for their own future.
Today, more than 150,000 members of our armed forces are caught in a civil war.
According to the Pentagon, overall levels of violence in Iraq have not decreased
since the surge began. The last three months have been the deadliest period for
American troops since the start of the war. It is time for the waiting to end
and for our troops to start to come home.

That is why we propose to end
the authorization for the war in Iraq. The civil war we have on our hands in
Iraq is not our fight and it is not the fight Congress authorized. Iraq is at
war with itself and American troops are caught in the middle.

to the two Senators, I present the 1864 DEMOCRATIC Party platform

Resolved, that this convention does explicitly declare, as the sense of the
American people, that after four years of failure to restore the Union by the
experiment of war, during which, under the pretence of military necessity, or
war power higher than the Constitution, the Constitution itself has been
disregarded in every part, and public liberty and private right alike trodden
down, and the material prosperity of the country essentially impaired, justice,
humanity, liberty, and the public welfare demand that immediate efforts be made
for a cessation of hostilities, with a view to an ultimate convention of the
States or other peaceable means, to the end that at the earliest practicable
moment peace may be restored on the basis of the federal Union of the

boy, don't they sound eerily similar, thank goodness the Democrats lost in 1864, and we can only hope for the same fate now.

Monday, July 9, 2007

Win The War

Anyone that still believes that not only is the Iraq war winnable but that losing is simply not an option needs to go here...


You will find a template that can be sent to your Congress person, Senator, and to your local newspaper. We need to mobilize and mobilize quick before it is too late. As I have said before, if we leave before we win there will be a hornet's nest left in Iraq, http://www.redstate.com/blogs/mike_volpe/2007/jun/21/leaving_a_hornets_nest...
That hornet's nest will spread and one day it will follow us here. So, please all go to the site and mobilize.

Sunday, July 8, 2007

Weekend Wrap Up

Michelle Malkin believes that the impeachment train is leaving the station again...


Personally, I think impeachment is the kind of fodder the Republican base drums up when they need some energy. I don't believe for one second the Dem leadership is dumb enough to try and impeach a sitting President during the middle of a war. Talking about snatching defeat from the jaws of 2008 victory, well, go ahead and try and impeach and see what happens. If we Republicans are machiavellian http://www.answers.com/topic/machiavellian we would all be calling our Senators and Congress people and demanding impeachment proceedings...

Redstate has the wrap up of the Sunday morning talk. Lots of Libby, Clinton, the London bombings, Iraq, and on FNS Juan Williams and Bill Kristol really go at it.


the Captain is yet another blogger to address Fred Thompson's past as a lobbyist...


Patterico has a legal defense of the warrantless wiretapping program...

Here is a defense, since when is spying on the enemy during war time a bad thing, and when did the Commander in Chief ever need a warrant to do it?

From the other side, the Kos Kids are 24/7 non stop "Scooter" Libby. Frankly, most of the members of my Phi Kappa Psi fraternity weren't this obsessed with porn, and believe you me, that says a lot.


Defending the Bush Tax Cuts

I continue to remain in the slightly less than 30% or so that still continues to support the President. I do it begrudgingly. I was not at all happy with the immigration bill, and of course, I haven't been impressed by the direction of the war in Iraq. I continue to support him because he stilll understands the nature of the enemy we face in a way that most Democrats don't. From the Patriot Act to enhanced interrogations, to Gitmo, the President has put in place the tools necessary to keep us safe even while facing an onslaught of criticism from the other side. The reality is that most of Bush's accomplishments came in his first term, and unless there is a miraculous recovery in Iraq he will go down as a failing President.

That said, there is one issue that the historians will agree on, and that is his tax cuts. I find almost all of the criticism of his tax cuts and economic policy to be totally infuriating. It is done mostly by people that either don't understand economics or figure the public at large won't.

Let's set the historical context. In March of 2000, Alan Greenspan surprised many and began a series of fed fund rate increases. The first increase burst the perverbial bubble in the internet craze. The market crashed and by the time it was over there was roughly three trillion in paper losses by the end of the year. http://finance.sympatico.msn.ca/investing/jimjubak/article.aspx?cp-documentid=4919504

The technical definition of a recession www.en.wikipedia.org/wiki/Recession
is two quarters of declining GDP however it goes without saying that the nexus for the recession happened with this initial and subsequent rate increases. The events of September 11th, 2001 have been well documented of course, however their effect on the economy aren't nearly as well known. The three months following October, November, and December 2001, the U.S. economy lost roughly 1 million jobs. www.bls.gov/schedule/archives/empsit_nr.htm#2001
To put that in perspective the economy needs to gain about 150,000 new jobs monthly to stay even.

Within months of this, it was revealed that Enron was "cooking the books" in reporting their profits for years, in what turned out to be one of the most complicated ponzi schemes in the history of business. www.en.wikipedia.org/wiki/Ponzi_scheme This opened the floodgates and within months and later years dozens of companies began to admit that they also had cooked the books from WorldCom to Global Crossings, the integrity of the filing system was now in question.

Make no mistake, anyone of these events on its own could have crashed the economy. The three together should have caused the economic version of the Perfect Storm. www.en.wikipedia.org/wiki/Perfect_storm

So, what kept the U.S. economy of the early 2000's from making the economy of the U.S. of the 1930's from looking good. It was of course the Bush tax cuts. The thing that bothers me about the attacks on the Bush tax cuts, is that everything I need to know to defend them I learned from Macroeconomics 101 as a junior in high school. I remember six weeks into the class my teacher telling us that at this point we knew more about economics than 90% of the country. Maybe that is why Bush opponents have been able to make an arguement against logic.

In my third week, I learned that there was two ways for the government to stimulate the economy: lower interest rates and lower taxes. Both of these elements were implemented in response to the recession and wouldn't you know it the economy is strong and has been since 2003. GDP continues to grow at about 3% annually, inflation continues to be around 2%, interest rates continue to be low, and unemployment is a healthy 4.5%. As Jack Ross once said in A Few Good Men, "those are the facts and they are undisputable"

So, why then do opponents continue to downplay the economy and the tax cuts that lead to it. Of course, in the last few years it has been criticism by ommission. You aren't going to find to many newspapers or broadcast news organization say much about the economy these days. In years, past there was all sorts of criticism. For a while it was the jobless recovery, then the deficit, and after a while Bush opponents scoured the economic numbers to find anything negative. At one point, the Democrats were bemoaning the small savings rate, as if the President could possibly affect how much people saved, or more importantly, savings, in a vacuum, is any measure of economic performance. In another episode, Democrats bemoaned stagflating wages, another meaningless number since most people get paid in something besides wages. (I, for instance, work in straight commission, and between bonuses, overtime, stock options, and commission for people like me, wages have become an outdated tool) Bush opponents have used any number they could find to convince the public not to believe what is obvious and in front of them.

That's the thing about economics. It is filled with numbers and statistics, and someone can find a number to back up whatever assertion they want. One can pray on a naive public to tell any story they want. For instance, how many times have I heard a Democrat proclaim that during the Clinton years we had a surplus while we now have a deficit. None of them of course ever say the consequences of having too great a deficit, which is high interest rates, which of course we don't have. Furthermore, I again go back to my first MacroEconomics class. I learned that during times of economic boom, the 1990's, we have surpluses and during times of recession, the early 2000's, we have deficits. These, I learned, are not only natural but necessary. Also, I learned that surprise, surpries, during times of war countries also run up deficits.

How many Democrats uttered the words, "tax cuts for the rich". Of course, this is an outright lie. Every tax bracket, including but not exclusively the rich, lowered their rate. The Democrats proclaimed that in dollar terms the rich got the overwhelming piece of the tax cuts. Well, in the words of any third grader, duh. The rich make the overwhelming amount of money and pay the overwhelming amount of the taxes. 3% of 50,000 dollars is a lot less than 3% of 1 million dollars. Of course, the rich got the biggest part of the tax cuts, their pool is by far larger. A millionaire pays more in taxes than most people make in income. They played the traditional class warfare, pitting the wealthy Republicans versus the middle class of the Democrats. Well as Gregg Jackson pointed out in Conservative Comebacks to Liberal Lies
targeted tax cuts, the kind the Democrats bemoaned, are nothing more than a form of communism, where the poor are propped up on the backs of the wealthy. Furthermore, logic tells us that it is the wealthy, not the middle class, that creates jobs. A three percent tax cut for someone making fifty thousand may put more money in their pockets, but they won't hire any new workers as a result of it. A millionaire on the other hand, is something totally different.

In the last five years, fatalist everywhere have bemoaned the upcoming doom of the economy, from gas prices to hurricanes, and now the Sub prime crisis we seem to always be just around the corner from a collapse. Despite all of these calls the economy motors ahead. The June jobs numbers were once again surprisingly strong and we are well on our way to another year where the economy grows about 2 million new jobs. This will be the fourth year in a row (2004, 2005, 2006, and 2007) that this will happen.

What bothers me most is that the same people criticizing Bush's record on the economy also point to the economy is the single best accomplishment of Bill Clinton. Well, to those, I have two words, Calvin Coolidge, http://en.wikipedia.org/wiki/Calvin_Coolidge, he also presided over a wonderful economy fueled by speculators that crashed right after he left office, and no one considers him a great President these days.Bush made a catalyst, the tax cuts, for the boom that followed. His economy wasn't propped up by the mirage of the internet boom, and yet those same people consider Clinton's record on the economy excellent, while Bush's is consdered a failure, and they all do it, either because they don't understand economics, or hope the public at large doesn't.

Thursday, July 5, 2007

Ron Paul 2008: Hope for America

That is the slogan of the Paul campaign on his website...http://www.ronpaul2008.com/

I must admit that I first got mildly fascinated and amused by Paul and his followers when I noticed that there were an abundance of them on a political message board that I spent too much time on. In fact, this is probably the truth in the overwhelming majority of political message boards. Check out the one at Pajamas Media...


in fact, he currently leads this weeks' straw poll at Pajamas Media


How does a candidate that barely registers a blip be such a force in the new media. This begins to explain the phenomenon...


According to this, Paul supporters are now manipulating the votes for Digg.com to favor Ron Paul. So, who is Ron Paul and what is going on?

Ron Paul is a small government, social conservative, libertarian, that is also dovish on the Iraq war on the war on terror in general. To say that this is a hard message in the current two party system is an understatement for sure. In 1988, he also ran for President only this time on the Libertarian Party ticket. Since 1997, he has represented the 14th District for Texas in the House of Representatives.

While he is running for President in the Republican Party, he differs with the base on the most important issue for the party itself, not just the war in Iraq, but the war on terror in general. He sounds more like a Democrat not only when speaking about Iraq, but Iran and our overall strategy in the war on terror.

For this reason, his supporters are NOT traditional Republican primary voters. I found some examples on line of his supporters... http://blog.myspace.com/index.cfm?fuseaction=blog.view&friendID=178459979&blogID=278924416
http://www.dailypaul.com/ http://v.mercola.com/blogs/public_blog/Ron-Paul-Stirs-Up-Presidential-Debate-14838.aspx
As it turns out, they are all tech savvy. For this reason, Paul is the first candidate on I Phone...

So, his followers go around the tech world and manipulate the system. Who could forget that Paul led for a while in the Fox News poll after their debate?
This is of course not the only poll that has been overrun by Paul supporters.

In fact, Paul supporters have been known to hype all kinds of things in order to create the illusion that his campaign is doing well...
Of course, the truth usually comes out http://www.capitolhillblue.com/cont/node/2838

In fact, the Paul supporters serve mostly the purpose of creating fodder for bloggers like myself. Their whole campaign is quite pitiful and pathetic. They manipulate unscientific polls and other mechanisms only to keep "their guy" in the spotlight so to speak, except no one cares, except those political junkies or commentarians, that only comment on the movement but would never support it themselves.

Wednesday, July 4, 2007

Independence Day Wrap

Joyce Lee Malcolm has a great piece about the founding fathers, their vision, and the vulnerabilities of their vision...


"It's easy now, in a nation awash with complaints about what
our Founders did not do, what imperfect humans they seem to 21st century eyes,
to overlook how startlingly bold their views and actions were in their own day
and are, in fact, even today. Who else in 1776 declared, let alone thought it a
self-evident truth, that all men were created equal, entitled to inalienable
rights, or to any rights at all? How few declare these views today or, glibly
declaring them, really intend to treat their countrymen or others as equal,
entitled to life, liberty and the pursuit of happiness?

Certainly not America's 20th century enemies, the Nazis and
communists; certainly not today's Islamic radicals, who consider infidels
unworthy to live and the faithful bound by an ancient and brutal code of law. We
are fortunate that the Founders of our nation were enlightened, generous,
jealous of their rights and those of their countrymen, and prepared to risk
everything to create a free republic.

Breaking with Britain was a risky and distressing venture;
could the American colonies go it alone and survive in a world of great European
powers? If not, what better empire than the British? It took a year of fighting
before the Continental Congress and the states were prepared to declare
independence. "We might have been a free and a great people together," Jefferson

Val Prieto at Babalu also has a nice piece...


"Thank you, America. For the opportunity - the privilege - of living in freedom. A freedom your sons and daughters have given their all for.
I promise, America, to support and stand by your ideals"

And for all you history buffs, try live blogging at the Continental Congress...



IN CONGRESS, JULY 4, 1776The unanimous Declaration of the thirteen united States of America

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected, whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice by refusing his Assent to Laws for establishing Judiciary Powers.

He has made Judges dependent on his Will alone for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For quartering large bodies of armed troops among us:

For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us in many cases, of the benefit of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies

For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.
n every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us.

We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.
We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these united Colonies are, and of Right ought to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.
John Hancock
New Hampshire:Josiah Bartlett, William Whipple, Matthew Thornton
Massachusetts:John Hancock, Samuel Adams, John Adams, Robert Treat Paine, Elbridge Gerry
Rhode Island:Stephen Hopkins, William Ellery
Connecticut:Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott
New York:William Floyd, Philip Livingston, Francis Lewis, Lewis Morris
New Jersey:Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark
Pennsylvania:Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross
Delaware:Caesar Rodney, George Read, Thomas McKean
Maryland:Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton
Virginia:George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton
North Carolina:William Hooper, Joseph Hewes, John Penn
South Carolina:Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton
Georgia:Button Gwinnett, Lyman Hall, George Walton

Monday, July 2, 2007

Iran in Iraq...Daily Kos yawns

Here was the story from Baghdad today...
U.S. Military: Iran Using Hezbollah as 'Proxy' in Iraq

Anyone that is really surprised that Hezbollah is now in Iraq just hasn't been paying attention. Iran has already used this same proxy to start another war not one year ago. 2006 Lebanon War & The Israel-Lebanon/Hezbollah War

In fact, their proxies are starting wars everywhere Analysis: The Hamas-Fatah war & Hamas Versus FatahOn top of that, the equipment, training, and cash for much, if not most, of the alphabet soup(IED, EFP, etc.) of homemade explosive devices that are killing our soldiers in Iraq originate in Iran ...Iranian EFPs Remember those EFP's that could only come from Iran? & Evidence of Iran supplying weapons, expertise to Iraqi insurgents

Why just a couple months ago, they went ahead and took some British Marines hostage Iran's new hostage crisisIran raises the hostage stakes

I haven't even talked about the 800 lb. gorilla in the room yet. Yes, Virginia, Iran is upto no good and it is high time we do something to stop them.

Not at the Daily Kos..."Iran Invades Iraq, So Bomb 'Em!" - List of Dems Who Say "Bulls--t!"They use this episode to take an opportunity to preemptively condemn the Republicans for rattling the sabers of Iran and war mongering.
It is of course in keeping. Guess who they were rooting for when Iran's proxy Hamas took on Fatah...Victory For Hamas In Gaza(can you root for neither side in a war?)
In Iran's other proxy war the Kos Kids weren't sure which side to take...Victory For Hamas In GazaDoes Hezbollah have a right to self-defense?Some believed that this melancholy was really more of a cynical spin job...Kos, Hezbollah, and Israel Not the Kos Kids, they would never act cynically...

For instance, this isn't cynical, "And now Rupert Murdoch's paper The Sun has announced that Iran has invaded Iraq. Tom Newton Dunn - a reporter of some credibility and now "Defense Editor" at The Sun - has attached his name to this story. Other Conservative journals are no doubt picking it up as I write this, but I'm not going to encourage traffic to their sites." nor is this, "This is how they do it: Develop the message on the Right Wing, and move it bit-by-bit into the MSM, see how it works. On the Right Wing, bombing Iran is simply a fait accompli. The Neo-Con argument for bombing Iran is self-evident. Neo-cons either bomb Iran or there is no reason for Neo-cons to exist. Who else do they have to bomb? Republicans know they need to widen this Iraq war. That's why all the major Republican candidates are talking "victory". As long as you can keep adding enemies and dropping bombs on them, you don't ever have to admit you lost"

This is the same group that uses every opportunity to question the legitimacy of Fox News as a source of news Carl Cameron DESTROYED in Outfoxed Video Clip Establishment players take aim at Fox NewsFox News: Libby NOT GuiltyThis is the same group that pressured the Democratic Presidential candidates to bow out of two debates sponsored by Fox News Who is attending the Fox News Debate in Nevada?ACTION: Freeze Out Fox NewsOne by one the candidates kowtowed to the whims of the Kos Kids Edwards Not Participating In Fox/CBC Debate Clinton, Obama Shun C.B.C.-Fox DebateWhat do we expect these candidates to do regarding Iran if they become President? They talk tough now...Democrats and Iran: Look Who Supports Bush's Next War Iran must know world won't back downbut how fast before they kow tow on this issue to the Kos Kids. The Kos Kids are already watching, "even such Anti-War Democrats as Senator Obama could not resist falling in line. And Dems have been using the anti-Iran rhetoric to some imaginary political "advantage" for quite some time". This is what our foreign policy will turn into in Democratic hands.
By the way, what I didn't see in that diary about Iran was any solutions, just criticism, but that is also so the Kos Kids...but I digress

One last thing, my response to that Daily Kos diarist is that, tecnically, most of the acts mentioned by Iran are acts of war Act of warThis is an important technicality to this diarist because I believe that the only response to an act of war is all out war, let alone multiple acts of war.

Why We Fight

Michael Yon has written a masterpiece that everyone should read...


Make no mistake that the enemy we face both in Iraq and beyond knows no limits to their depravity.

As we passed through the village, Captain Combs pointed out the nice houses,
saying the people had been simple farmers with comfortable homes and
lives. Until Al Qaeda came...

I told the Iraqi commander, Captain Baker,
that it
was important that Americans see this; he took me around the graves and
showed more than I wanted to see. He said the people had been murdered by al
Qaeda. I made video of him speaking, and of the horrible scene. The heat and
stench were crushingly oppressive and broken only by the sounds of shovels
Iraqi soldiers kept digging....

Soldiers from 5th IA said al Qaeda had cut the heads off the children. Had al
Qaeda murdered the children in front of their parents? Maybe it had been the
other way around: maybe they had murdered the parents in front of the
Maybe they had forced the father to dig the graves of his

Make no mistake, if we cut out of Iraq in any of the timetables or phased withdrawals that have been mentioned, we will leave it to a hornet's nest of evil that we witness in Yon's piece...


Here the law of unintended consequences applies


Sunday, July 1, 2007

Confronting a Sociopath

For proper context, this story needs to start at the beginning, about a year ago. I was working as a mortgage broker. Bobby was working with a buddy of mine who was also a colleague. My buddy was helping him close loans that Bobby had been bringing in. The problem was that my buddy was totally incompetent. Bobby was bringing in deals only to have them get blown up by incompetence while they were being processed. http://www.americanloansearch.com/info-loanprocess.htm The loans kept getting denied and Bobby was always smoothing things over with the client. . I was more experienced and they were making what I refer to as “rookie mistakes”. I started helping and I saved a couple deals.

One November night, Bobby proposed that we open a satellite office for our mortgage company. He was in tight with the owner so we would get great terms. We ultimately decided that he would work with me from now on and that we would try and shoot for getting the satellite office going by January 1st. The weird thing was that Bobby sort of just started coming and working with me. He never told my buddy what was going on and we just let him figure it out on his own. At this point I will admit that I was along for the ride with Bobby in all his sociopathy http://en.wikipedia.org/wiki/Sociopathy

Once I started working with him, I realized that he knew very little for someone who had been around the business for five years as he claimed. I tried to teach him the basics of the business. For instance, each loan is unique. What we, as mortgage brokers, try to do is break down the individual characteristics of the loan, like credit score, Loan to value, property type, etc. and we call this a scenario. Most banks allow a competent mortgage broker to enter this so called scenario right over the web on their site to produce exact terms for a loan. Obviously, Bobby couldn’t perform this function. This takes about ten minutes to learn and still Bobby somehow had managed to get by without learning it for five years.

Whenever I tried to teach him, he would resist. At first, he claimed that it was unnecessary for him to know. He simply wanted to be the so-called rainmaker. He would bring the deals in while someone else would put it together. Unfortunately, our business doesn’t work like that. One cannot be totally incompetent, the way Bobby was, in the structure and process of loans, and still be able to close consistently. The client knew more about the process than Bobby did and you just can’t survive like that no matter how smooth a talker you are, and Bobby was. Bobby a would agree with my analysis of the business and his prospects in it, however he would always find a reason not to get started right now. He was always in a state of motion. Whether he was going to church, or a friends’ house, or some guy about some deal, he was never around long enough to teach him anything.

Bobby was always finding new reasons not to learn any of the business I was trying to teach him. For a while he was using the excuse that he we hadn’t yet closed a loan together. In other words, I had to prove myself before he would try and learn anything from me. Psychological stunts and tactics were a Modus Operandi. http://en.wikipedia.org/wiki/Modus_operandi After we started closing a few loans he found a new excuse. Now, he wanted to wait until after this one deal would close because he was making a ton on it. He claimed that short term financial woes were blocking his focus. Right after his “big” loan had closed, I still had these delusions that I would still be able to get Bobby to learn.
Training people had become a bigger part of my job and I had one major success. I had trained in the previous few months a 23 year old guy that I started to refer to as my protégé. He had become quite competent quite quickly. He was able to put together deals rather well especially considering he hadn’t even been in the business for a year. Bobby noticed this and must have figured that he would be getting my knowledge without the annoying attitude and the insistence that he would do such awful things as work and learn. My protégé was his perfect next target.

For the next week or so Bobby came into the office sparingly. He would say hello and be gone soon afterward. I simply put two and two together, after a while and realized that he decided he wasn’t working with me anymore. He never actually confronted me about it, in the same way he never directly confronted my friend when I was on the other side.

Bobby came back to me about a month later. He had no choice. He had a potential deal worth about 700k that was too complicated even for my protégé. Again, I was still under the illusion that I could still teach Bobby. One day I was going over the technical aspects of the loan when he started blowing up at me. He began to berate me in front of several people including my protégé. He went so far as to say that I was a horrible teach and that I had no people skills. He said all sorts of nasty things to me that seemed totally out of line considering what I was trying to do. It seemed even more inappropriate because he said everything in front of my protégé. The whole tirade lasted for about ten minutes and it was unnerving.

I put everything together and I finally came to the conclusion that Bobby was a sociopath. I had the same thoughts that some of you had, and I realized that I was beginning to think everyone was a sociopath. Still, everything I thought of fit the profile of the literature. He had reminded me of a passage I had read from the book The Sociopath Next Door by Martha Stout http://www.amazon.com/Sociopath-Next-Door-Martha-Stout/dp/076791581X

"Or let us imagine the opposite extreme--you have no interest in
power. To the contrary, you are the sort of person who really does not want much
of anything. Your only real ambition is not to have to exert yourself to get by.
You do not want to work like everyone else does. Without a conscience, you can
nap or pursue your hobbies or watch television or just hang out somewhere all
day long. Living a bit on the fringes, and with some handouts from relatives and
friends, you can do this indefinitely. People may whisper to each other that you
are an underachiever, or that you are depressed, a sad case, or in contrast, if
they get angry, they may grumble that you are lazy. When they get to know you
better, and get really angry, they may scream at you and call you a loser, a
bum. But it will never occur to them that you literally do not have a
conscience, that in such a fundamental way, your very mind is not the same as
theirs. The panicked feeling of a guilty conscience never squeezes at your heart
or wakes you in the middle of the night. Despite your lifestyle, you never feel
irresponsible, neglectful, or so much as embarrassed, although for the sake of
appearances, sometimes you pretend that you do. For example, if you are a decent
observer of people and what they react to, you may adopt a lifeless facial
expression, say how ashamed of your life you are, and talk about how rotten you
feel. This you do only because it is more convenient to have people think you
are depressed than it is to have them shouting at you all the time, or insisting
that you get a job

Bobby started fitting every profile. He was totally promiscuous and he had been involved in all sorts of criminal enterprises in his past. Even the way in which he treated his client screamed sociopath. Once, we tried to refinance a “friend” of his. The savings was about seventy dollars a month and it didn’t seem worth it to me for her to pay all the closing costs for such a small savings. She was a professional singer and Bobby assured me that she wouldn’t notice. It turns out she did. She started thinking about canceling in the days or rescission. http://www.thetruthaboutmortgage.com/right-of-rescission/ Bobby did some double talking and made up a few lies and suddenly she was convinced. One time he actually stole a garbage can from a Chinese restaurant (I guess it was a “cool” looking garbage can)

Here is a list of behavior traits: http://www.hss.caltech.edu/~mcafee/Bin/sb.html

  • Glibness and Superficial Charm
  • Manipulative and Conning They never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming, yet are covertly hostile and domineering, seeing their victim as merely an instrument to be used. They may dominate and humiliate their victims.
  • Grandiose Sense of Self Feels entitled to certain things as "their right."
  • Pathological Lying Has no problem lying coolly and easily and it is almost impossible for them to be truthful on a consistent basis. Can create, and get caught up in, a complex belief about their own powers and abilities. Extremely convincing and even able to pass lie detector tests.
  • Lack of Remorse, Shame or Guilt A deep seated rage, which is split off and repressed, is at their core. Does not see others around them as people, but only as targets and opportunities. Instead of friends, they have victims and accomplices who end up as victims. The end always justifies the means and they let nothing stand in their way.
  • Shallow Emotions When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.
  • Incapacity for Love
  • Need for Stimulation Living on the edge. Verbal outbursts and physical punishments are normal. Promiscuity and gambling are common.
    Callousness/Lack of Empathy Unable to empathize with the pain of their victims, having only contempt for others' feelings of distress and readily taking advantage of them.
  • Poor Behavioral Controls/Impulsive Nature Rage and abuse, alternating with small expressions of love and approval produce an addictive cycle for abuser and abused, as well as creating hopelessness in the victim. Believe they are all-powerful, all-knowing, entitled to every wish, no sense of personal boundaries, no concern for their impact on others.
  • Early Behavior Problems/Juvenile Delinquency Usually has a history of behavioral and academic difficulties, yet "gets by" by conning others. Problems in making and keeping friends; aberrant behaviors such as cruelty to people or animals, stealing, etc.
    Irresponsibility/Unreliability Not concerned about wrecking others' lives and dreams. Oblivious or indifferent to the devastation they cause. Does not accept blame themselves, but blames others, even for acts they obviously committed.
  • Promiscuous Sexual Behavior/Infidelity Promiscuity, child sexual abuse, rape and sexual acting out of all sorts.
  • Lack of Realistic Life Plan/Parasitic Lifestyle Tends to move around a lot or makes all encompassing promises for the future, poor work ethic but exploits others effectively.
  • Criminal or Entrepreneurial Versatility Changes their image as needed to avoid prosecution. Changes life story readily

I realized that Bobby had been playing me since that first conversation about opening an office together. To him, opening an office meant that I would do almost all of the work involved with running it, while he made enough to get by. If it didn’t work out, I have no doubt that he had a way out that would leave me stuck on my own. He was in tight with the owner. He probably could get out of any agreement, or at least, I am sure he thought he could. Once he realized that I was going to be insistent on teaching him so that he did everything, he bought time while he figured out a way to extricate himself from me. He worked with my protégé because my protégé would be willing to do all the work and not insist that Bobby actually learn to do it himself. He was looking for a sucker that was willing to do all the work while he made enough to get by.

He never had any intention of learning anything. In fact, anytime I tried must have been among the worst experiences of his life. He wanted nothing to do with learning. It may have been possible that in the beginning he just had a perverted view of the way the office was going to be run. Still, at some point he must have realized that there was no way he was ever going try and learn anything. He knew that this is the way I would have wanted to run it as such. He never had a heart to heart. Instead, he pretended as though everything was fine. By everything, I mean in the long term. He would then come up with excuses to not learn. At the same time, he would reaffirm commitment to the overall goal. There I was hanging onto hope that one day I could get him to change and be more attentive to the technical side of the business. I took the whole thing as a challenge. I thought that if I could get him to learn I could be successful with most candidates. He never had any intention of learning whatsoever.

Without thinking it through, I decided to confront him. At this point, I still wasn’t sure I was right, and in fact I was pretty sure I was overreacting, but I didn’t think this was something that I should just overlook. I was feeling quite tired the next day. I confronted him but I wasn’t on top of my game when I did. He immediately lashed out at me in an aggressive way. Many of the same things he had pulled in the earlier episode, he brought back. For instance, at one point, he again accused me of not having people skills. There was a lot of rationalization. At one point he asked rhetorically, “am I a sociopath just because I manipulate s$%t at work”

Going into the conversation I wasn’t really sure I was right, however after witnessing his performance I actually became more sold. For instance, I probably said it the wrong way. I should have said that some of the things he had been doing was sociopathic in nature. I thought about it though, and I think he may just really be a full fledged sociopath. The literature says that the sociopath lashes out at anyone that confronts them on their behavior. They also deny the behavior at all costs.

Bobby walked out of my office swearing we were through as friends, and we were. I feel lucky. After reading more literature, I figured he would lash out at me even more. I thought he would go to the owner and use their friendship against me. There was a lot of things that I thought he would do, and they may all be the overworked imagination of an obsessed individual, however I have no doubt that when I confronted Bobby that day, I was confronting a sociopath with the truth of his situation. You want a scary story, try doing once in your life.