Things are not so good out there. The unemployment rate, already stubbornly high, climbed even higher in May. Economists are revising economic growth predictions downward. Housing prices continue to drop, thereby further reducing household wealth. Real returns on bank deposits and Treasury Bills are negative. The dollar is dropping. Gas prices are up, inflation is up. There are some bright spots, certainly, but the overall picture is that of stagnation. Unfortunately, none of this is a great surprise given what the government has been doing of late. We are printing money and artificially holding down interest rates to try and spur recovery. But, this is creating those negative real (after inflation) interest rates, which are distorting capital flows. Most of the country’s tax policies expire in 18 months, so no one can do any long-term investment planning about taxes with any certainty. The government is retarding the development of almost all forms of economical energy (oil, gas, coal, nuclear), while subsidizing expensive wind and solar. We continue to run record deficits, which divert capital from other more productive uses and create the massive public debt overhang… Read More

I have been in Congress nearly 6 years now. During that time, I have heard a number of speeches from the podium on the House floor. I have heard 2 U.S. presidents and any number of prime ministers and presidents and chancellors of other nations. But, last week’s speech by Israeli Prime Minister Benjamin Netanyahu was the best speech I have yet heard in those chambers.

First, from a clinical perspective, he is a great speaker. He used notes, but no teleprompter. Those little glass stands that you always see when Obama speaks were not there. Not using a teleprompter allowed him to ad-lib, as he did when a protestor started yelling in the gallery, without worrying that he would get out of synch with whoever was operating the prompter and thereby either miss or repeat a paragraph. Without that machine in between him and the audience, he made a connection that others fail to make. I could feel his courage. I could feel his strength. And, most importantly, I was overwhelmed by the sincerity of his remarks. I felt he was being completely honest and authentic. Many American politicians could learn something from him.

And, from the standpoint of the message,… Read More

About 10 days ago, I wrote you all about the Housing Finance Reform Bill (H.R. 1859) that I have written and am sponsoring along with Gary Peters (D-MI). I mentioned in that missive that this is an important bill that will consume a great deal of my time and energy over the coming months. Based on the numerous responses from all of you, you seem to agree. I appreciate all those who responded offering your support and assistance in moving this bill forward. I will be separately contacting those of you who did soon.

Reading your responses last week, I noticed there were questions on this fairly complex issue that came up several times. So, I have decided to include the “most asked” questions into this edition and am answering them to give you an even better idea of what this bill is, how it works and why I wrote it:

1. John, isn’t your bill just recreating the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac again? It looks like you are just going to have 5 of them instead of two.

No. The whole point of this bill is to kill the old GSE system and replace it with something completely different that will provide… Read More

Housing Finance Reform: Housing is an enormous sector of our economy. We never go into recession without housing leading us in. And, we never come out without housing recovering. Arguably, part of the reason that our current economic recovery is so tepid is because the housing recovery is very weak. When you consider the construction of new houses, the sales of existing houses, the construction and remodel and renting of apartments, the home improvement industry and so forth, it represents a tremendous amount of employment, economic activity and is fundamental to a standard of living. And, none of it moves without adequate financing. Hardly anyone buys, builds or improves a house or apartment paying cash. Pretty much everyone needs to borrow some money.

The method under which most people borrowed that money during the last 70 years was through the assistance of the “government sponsored enterprises”, Fannie Mae and Freddie Mac. And, it worked pretty well for most of those 70 years. But, as we all well know, both enterprises failed rather spectacularly in 2008 and were a major component of the economic crash that year. The… Read More