Before I get into what I believe the Federal Government shouldn’t be doing concerning the subprime melt-down and why, I’d like to make a simple point.  Most people in America do not have sub-prime mortgages.  Heck, a lot of people don’t even have mortgages, so why should all of those without sub-prime mortgages or no mortgages at all be responsible for paying for the problems of those that have difficult mortgages? 

That being said, it appears that the subprime melt-down is causing a lot of problems for quite a few people.  Of course that can mean only one thing.  It must be time for the Federal Government to meddle where it doesn’t belong – in other words, what can they do to make it look like they are helping so that they can buy your votes?

The current mortgage mess was brought on by one simple factor – GREED.  Greed on the part of mortgage lenders, greed on the part of Wall Street and greed on the part of borrowers.  There is an old saying that goes, “Pigs get fat, hogs get slaughtered.”  Right now the hogs of the mortgage business are getting slaughtered and I’m of the opinion that it is NOT the business of the Federal Government to get involved in bailing out individual homeowners for three major reasons.

First, this is a market correction that is long overdue.  Real estate prices had been spiraling out of control for a while now in quite a few parts of the country.  Here in California, housing price increases were completely out of control and a lot of people knew a correction was in the offing and in fact, that a correction was needed.  When the stock market got out of control during the Internet boom and then had it’s massive correction, did the Federal Government bail out all of the people who got hurt by the massive devaluation of the stock market – NO.  So why should they now?

Second, who gets bailed out?  There are a lot of different types of people who may or may not get hurt by this market correction.  Let’s make a partial list.

Homeowners who have normal loans or no mortgages at all – No concern here except for the fact that their tax money will get spent on any bailout and is that really fair?

Property owners with subprime loans – This is where it gets complicated because not all of these people are created equal.

1.  We have the investors who were out there using the easy credit to buy homes like there was no tomorrow.  Should they get bailed out of their bad loans?  Most people would say no, because they were taking a risk and deserve what they got because they were being greedy.

2.  We have homeowners who have subprime loans who are not in danger of losing their homes because they budgeted properly.  Should we make the lender change the terms on their loans because, well in retrospect, they just don’t seem fair?  Doesn’t seem likely and definitely isn’t the job of the Federal Government.

3.  We have homeowners who have subprime loans who may be in danger of losing their homes, but even this is not a simple category. 

There are those that just bought too big a house for their income - Do we reward their greed by having the Federal Government bail them out at our expense so they can live in a bigger house than they should reasonably have for their income levels?  This doesn’t seem right to me. 

There are those who bought the right amount of house several years ago, but with rising housing prices and easy refinancing they have refinanced several times always taking money out to buy cars, boats, home improvements, etc and now find that they can’t afford the payments.  Do we reward their greed by having the Federal Government bail them out at our expense because they made bad decisions about using the equity in the house for things it shouldn’t be used for?  This doesn’t seem right to me. 

There are those that just bought at the top of the market.  I guess the same could be said about all of those people who bought stocks in the last year before the Internet crash, but did we bail them out?  No, so why is it the business of the Federal Government to bail out individual homeowners now?  I contend it isn’t.

Third, a bail out is not fair and sets a very bad precedent.  What is fair about using our tax money to bail out people who made bad decisions or were greedy?  What happens the next time there is a stock market downturn?  Since we bailed homeowners out of bad loans, do we now use our tax money to bail people out of bad stock investments?  Also, doesn’t it set a precedent for encouraging risky behavior. 

With the Federal Government so anxious to bail someone out, just who do they think they should give the bailout to at this time?  Is it investors, homeowners with good loans, homeowners with “bad” loans that are okay, greedy subprime borrowers or just borrowers with bad timing.  Unfortunately, it will probably come down to where they think they will get the biggest bang for “our” dollars when it comes to voting in the next election.  It will have little to do with what is really the right thing for the market or whether or not it is even the job of the Federal Government to get involved in this way, but a lot more to do with how they can buy our votes in the next election.

Market corrections are a natural part of a market economy.  They are important and necessary for any market and usually good for the market overall.  If a market gets out of control, like the housing market had become, the correction can be rather strong, but it is only that, a correction.  A market correction, while painful for some, will usually produce an overall net benefit – in this case greater housing affordability.

The Federal Government’s responsibility in this matter runs towards how the Federal Reserve controls the interest rates in the country.  They should have been Statesmen and raised rates when it was recognized by almost everyone that the market was overheating due to extremely easy credit.  Instead they chose to let the party continue out of control until people started getting hurt and the cops had to be called in.

The proper time to have done something was when the market was overheating in the first place by tightening credit so that it wouldn’t have gotten so out of hand.  However, no one in government ever wants to be accused of spoiling everyone’s “fun” as that just causes them to lose votes.  Once again, that is why we need Statesmen running the country and not politicians.  Statesmen make the hard decisions and do what is right for the country regardless of whether or not it makes them unpopular in the instant.  Politicians do everything for votes.

Going forward the proper role of the Federal Government should be to set fair interest rates for the overall economy, to let the market take its course and to work with the states to ensure that lending practices are fair and reasonable for all potential home buyers.

“Anything is Possible in America”

Personal responsibility is just that – personal.  If you do something stupid and you get injured or hurt, then it is your own fault.  It’s not McDonald’s fault if you get fat, it’s not Phillip Morris’ fault if you smoke and get lung cancer; it’s your fault.  One of the biggest problems facing America is that many people want to find someone to blame for everything that happens to them.  Well sometimes it’s your own fault, sometimes it’s just bad luck and sometimes it is truly someone else’s fault. But let’s get away from this victimhood mentality and back to standing on our own two feet and taking responsibility for our own actions.

After being out of the country for two weeks, one of the first news reports I saw on early morning television in Miami concerned an accident at a carnival.  From the report, it appears that a teenage girl got injured when she went on the tea cup ride at a carnival, got too dizzy and fell and hit her head.  So naturally, at least in this country, they were going to sue.

Let me get this straight, isn’t the purpose of the tea cup ride to go in circles as fast as you can to get dizzy?  Don’t you actually turn a wheel in the middle to make it spin even faster?  Isn’t that why people, like me who can’t deal with being dizzy, don’t go on that type of ride?  Does the ride operator have to conduct pre-ride tests to determine if the person going on the ride can’t deal with dizzy?  Even then, they would probably be sued by people who felt they were unjustly kept off the ride.

We engaged in some fairly risky behavior in Costa Rica.  We took a zip line tour through the jungle trees.  We drove, including the underage members of our families, ATV’s across the beach and through the jungle at high rates of speed.  We went snorkeling in the open ocean.  We took numerous small boats across the ocean and down crocodile filled rivers.  Never once did we sign a liability waiver or a notice that we were engaging in hazardous activities that could result in injury or death.  Could we have gotten hurt?  Yes, and there were some minor injuries from the ATV excursions, but it was up to us as adults to determine if we wanted to engage in the activities and take the risks associated with them. 

The explosion of liability lawsuits and the desire of people to want to sue for just about any perceived injury or injustice are completely out of control in this country. How many millions of decisions are made every day based on the fact that, “We better do this to cover ourselves in case we are sued”? Not because it is necessary, but just as insurance from getting sued. 

How often have you heard even children say something about suing someone for some perceived wrong.  It has become a national mindset and it is not good for the country.

The Tort Tax is a major drain on this country.  It has been estimated recently by authors McQuillan and Apramyan that our current legal system and the desire of everyone to sue is costing this country as much as $865 billion per year, or to put it another way, $9,827 per year for a family of four.  If people were actually paying this amount directly out of their pockets there would be revolt in the streets, but instead, this is a hidden levy on all Americans and costs each of us every day.

Here’s where the costs come from and how we get hit with those costs every day.

First, there are the costs of litigation which are added to the cost of every product we buy every day.  No matter what anyone makes these days there is the very real chance that someone is going to sue the maker of that product because they were “hurt” using it.  Doesn’t matter if they did something entirely stupid, surely the manufacturer is still somewhat to blame.  Next time you are in a hardware store look at all the warnings on ladders to see all the ways the manufacturer has to warn the user to try and prevent themselves from getting sued and it still doesn’t prevent that from happening.  In our office building there was an entire law firm that did nothing but represent ladder makers against lawsuits and they had to move because they needed more room for more lawyers.

Second, medical liability is a major factor in increasing health care costs.  The fear of being sued has prompted many doctors to routinely engage in defensive and expensive medical practices by ordering extra tests and sending people to specialists just to cover themselves in case some one decides to sue.  It has also caused a severe shortage in several medical specialties such as obstetrics as doctors just get tired of being sued for things that are completely out of their control.

In the current health care debate the question needs to be asked, “How many more people would have health insurance coverage if the cost of medical insurance was much lower?”  Also, an interesting side note is that in the medical systems that Michael Moore held out to be excellent examples of universal care around the world there is almost no recourse for medical malpractice, regardless of how incompetent the doctors might be.

Third, innovation is also stifled by the cost of litigation in this company.  It doesn’t matter how well a product works or what benefit it has if there is the slightest chance that someone can figure out a way to improperly use it and hurt themselves.  Also, as companies have to pay ever increasing costs for their product liability insurance they have even less to spend on developing new products which, in turn, causes less economic growth.

The bottom line of all this is that, as President, one of the main aspects of American life that I would attempt to reform would be that of legal liability.  I’m not for letting someone off the hook if they truly develop a faulty product and put it in the marketplace or if they are truly responsible for injuring someone else, but at the same time we need to be a nation of adults and take responsibility for our own actions. 

How would I work to reform legal liability since most liability questions are state issues and not the responsibility of the Federal government? 

• I would do so by appointing Federal judges who believe that people should be responsible for their own actions. 
• I would appoint Federal judges who believe that life itself is risky and that sometimes bad things just happen and no one is at fault. 
• I would appoint Federal judges who believe that it should be easier for people who are sued to collect their defense costs when they beat those that sue them. 
• I would appoint Federal judges who believe that the practice of medicine is not an exact science and that unless doctors make blatant errors that maybe they aren’t to “blame” when things don’t work out exactly how people believe they should.

I don’t know about you, but this family of four could sure use an extra $9,000 worth of purchasing power that we don’t have now because of the cost of everyone always wanting to sue and win the legal lotto.

“Anything is Possible in America”

Of course, I did hear about the tragic bridge collapse in Minnesota.  Unfortunately, in one of my earlier emails of the campaign I discussed the poor state of the infrastructure in our country and this accident and all the subsequent hand-wringing has proved my statements to be correct.  Even President Bush surprised me when he took the very uncharacteristic stance of saying that we didn’t need an additional gas tax to fix the problem, but maybe we should be spending the money we have in more effective and meaningful ways.  I will admit that I called for an additional gas tax earlier to deal with this problem, but in this case the President is right.  We need to just manage our money and what our Federal agencies do a lot better.  Maybe a lot of the problem is that our Federal agencies are involved in and spending money to try and control things that they shouldn’t be doing.

A perfect example of that is the main purpose of today’s email and concerns a topic that was in the Wall Street Journal last week and from which I borrowed my title.  The title, “The New Right to Life“  concerns the struggle of the dying to try experimental drugs, alternative therapies and whatever the heck they want to do and the great lengths the FDA goes to prevent that from happening. 

There is something seriously wrong with a Federal Agency trying to control what someone who is dying wants to try to do to solve the problem or prolong their life. 

Quite honestly it is none of their damn business.

So what if someone wants to try something that is not “proven”.  Maybe it will make a difference for them or to the next person with their disease.  Maybe it will show promise for curing something else.  Maybe it will give that person’s life just a little more meaning.

So what if what they try hastens their demise?  It was their choice and they went down fighting.  Isn’t that what life is all about?  Fighting for everything we’ve got and then fighting to keep it.  Isn’t that what liberty and being an American is about?  The freedom to do what you believe is right for yourself as long as you are not in danger of bringing harm to others.

Prior to leaving on our trip I read yet another article about the FDA that left me stunned.  It was about an action taken by the FDA concerning a new drug.  The drug passed all its tests.  There weren’t any problems with the drug and yet, the FDA in its infinite wisdom, decreed that the drug wasn’t necessary (there was already another couple of drugs on the market that treated the same problem) so the company couldn’t make it. 

So now the FDA is deciding what the market does and doesn’t want or need.  Are we becoming a centralized state where all production decisions are made according to what some central planning group, in this case the FDA,  determines what is good for the country?  Didn’t the Soviets spend decades proving that this type of system doesn’t work?  If so, why do we seem to be heading down this path?

The answer is bureaucratic power.  Our Federal Government is drunk with the power of the bureaucracy and the two major political parties will do nothing to slow that growth because they both thrive on it. 

The most dangerous words in the English language these days are: “It’s for the public’s safety.”  Those words seem to give the Federal government the power to do just about anything they want to reduce your liberty in the interest of your perceived safety.  Doesn’t matter if it is really necessary or even prudent, but it sure is a nice excuse for a government bureaucrat to expand his power base and build an empire on the backs of our freedoms.

The Constitution is the best document every written to protect individual liberties, but Federal Agencies seemed to have morphed into these monsters that believe that you only have liberty if they want to give it to you. 

Don’t get me wrong, I’m not calling for the abolishment of the FDA as it does serve a useful purpose, but if you’re dying and want to try something not approved by the FDA, be my guest.  It’s your life and you deserve the dignity and respect of being allowed to do what you feel is best for you. 

As President, I would call for all government agencies to “pull in their horns” and get back to their core responsibilities.  Our Federal government is already too large and close to being completely out of control.  The purpose of the Federal Government is to protect our liberty, not subject us to ever increasing federal regulatory schemes.

“Anything is Possible in America”