Will Scapegoated Brokers Finally Target the Fed?

Moody's now predicts a housing price collapse of 30%, but Bush's subprime bailout is dangerous idea. The best Wall Street minds predict the bailout will cut house prices even more! And, sadly, there may even be some abuse or crime being covered up in the bailout.

With every housing collapse - caused as usual by the Federal Reserve's overreactive rate cuts in response to economic conditions - there is legislative payback imposed by Congress, and the scapegoats are the small businesses with no resources to defend themselves politically. This happened in the 1990s, when the mortgage brokers - usually mom-and-pop operations - suffered class action lawsuits and "high cost" mortgage regulations as a result of an inflationary "Bust" that was caused by the Fed. The political scapegoating never ends, and the Fed always remains "above the fray"? Why do financial professionals ignore the cause?

And now it's happening again, with House passage of this bill to help the poor homebuyers up to their necks in subprime mortgages. And another story here. And here's NAMB's grassroots alert on the threat.

Heritage's Ronald D. Utt says, "H.R. 3915 Would Impose New Burdens and Limits on Moderate Income Borrowers." I was the lobbyist for the National Association of Mortgage Brokers (NAMB) during the class action crisis of the late 1990s. So I know how endless this attack on small business is. Here's a Competitive Enterprise Institute (CEI) blog on the bill. Another CEI expert puts partial blame on bond rating problems.

So the question becomes, instead of just fighting the annual attack from Congress or an Agency, why not look to a more powerful solution, like taking on the whole idea of unconstitutional government, central banking and fiat currency?

The Ron Paul Presidential Campaign certainly is discussing these larger issues. Under the Founder's Constitution, says Candidate Paul, individuals could buy and sell freely among each other, with no government interference unless there is force or fraud. Local courts - or, increasingly, private dispute resolution - could adjudicate disputes. "Reputation," not regulation, would protect consumers, who would become better shoppers when they know that "caveat emptor" rules, and private third party information sources would become the lynchpins of quality.

And credit would become more stable in price, as the "see-saw" Fed is replaced with a banking system free of "Boom-Bust" Cycle-causing support or interference. Currency would be backed by hard resources such as gold, and credit would be priced like any other good or service - according to the classic law of supply and demand. Consumers would regain value in their dollar. Here's a YouTube video on CentralBanking. And here's Auburn University's Mises Institute, summarizing Ron Paul's economic plan.

With no housing/mortgage regulation at the federal level, since no such Power is authorized by the Constitution's Article One Section Eight to the Federal Government, even excessive State regulations would be overturned under a proper reading of the Commerce Clause - which protects interstate trade from government-imposed costs.

Here's the Cato Institute on why Ron Paul is the "darkhorse" potential next President.
CNBC's Maria Barteromo just interviewed Paul on the Fed's role in causing our Recession.

But do any mortgage brokers have a clue as to the role of central banking and fiat currency - or any of the other unconstitutional laws - in their suffering during Recessions? I tried to educate the industry in 1996, when I got NAMB to invite financial consultant Bert Ely to speak at the Convention, how brokers are the victims of the inflation, caused by the Fed. He said "brokers find themselves at the end of the Fed's whip."

And Congressman Paul has studied this matter since Nixon depegged the dollar from gold, and now serves as the Ranking Member of the Banking Committee's Subcommittee on Monetary Policy. Here's Mr. Paul on the Fed's new chairman, Ben Bernake.

So, while NAMB certainly will fight the latest attack from the House bill (now pending action in the Senate by Banking Chairman Dodd (D-CT)), will any financial professionals get involved in the Ron Paul Campaign, to help him raise the much more important issues of unconstitutional laws, and Federal Reserve/Fiat Currency-aggravated inflationary Boom-Bust cycles, and how they victimize small business and the non-wealthy? Let's hope so.

But if "having a chance to win" is a requirement to support a candidate, luckily, you're in luck. The Zogby Polling Company now gives Paul a chance to win! And the Washington Post says the Paul Campaign is making "libertarianism" the new "it philosophy".

Back to housing bailouts, AEI's Wallison is against it, at least for the GSEs. And the New York Times says the credit spigot to businesses now is being shut off. Here comes the Recession. And here's Cato on government's money monopoly.