Freedom Line Blog

While the federal government continues to create moral hazards for people trying to stay in their soon-to-be-foreclosed homes, TwinRock LLC is giving those same people a reason to hope: letting former homeowners rent their foreclosed properties at reduced rates.

So far TwinRock has purchased 22 homes in Moreno Valley, Riverside, Corona, Rialto, San Bernardino, Highland, Murrieta, Wildomar and Temecula, and the company has plans to buy several hundred more, said Meyer.

Earlier this year, TwinRock put together a $6 million fund to enable the company to buy about 40 Inland homes and it is getting ready to raise another $15 million, Philips said. The firm’s investment model primarily calls for buying houses with cash at trustee auctions conducted each weekday at Inland courthouses, he said.

There’s another benefit to keeping people in their homes:

Letting former homeowners remain in the foreclosed homes as tenants also eliminates the potential that the homes will be vandalized by angry former owners facing eviction, Meyer said.

TwinRock’s solution isn’t for everyone.  Some homeowners are so indebted in other areas they need to declare bankruptcy and restart their financial history.  For many others, however, renting one’s home with the possibility of buying it back later is much more attractive than waiting for a temporary government bailout.

H/T: Riverside (CA) Press-Enterprise

Sen. Kay Bailey Hutchison (R-TX) calls the next fiscal fight – raising the statutory debt limit when it’s reached in May – “Armageddon” and the most important policy decision of most members’ careers.

Check out her explanation here.

Listening to President Barack Obama’s post-budget deal remarks it was jarring to hear the Commander-in-Chief say that the group most benefited from a budget deal was…a group of Colorado 8th graders visiting the nation’s capitol next week.

Apparently, visiting a national monument trumps military personnel getting their paychecks on time.  No doubt a child’s field trip is important, but it pales in comparison to making sure soldiers and their families can make mortgage payments and buy food.  If Obama can’t correctly identify which of the two is more important, it shows just how clueless (or careless) he is about governing priorities.

The (British) Guardian promotes an interesting theory about the 2012 electoral cycle: maybe Republicans should focus more on winning the Senate than the presidency.  Here’s the rationale:

And here’s more potential bad news: in 2014, another 20 Senate Democrats are up for re-election, compared to just 14 Republicans. That means over two successive election cycles, 43 Democrats – 80% of those currently in office – must defend their Senate seats, compared to just 24 Republicans. Could the GOP end up with a 60-vote super-majority of its own, just two years before laying siege to the White House in a post Obama contest?

The strategy doesn’t explicitly cede the presidential campaign to President Barack Obama, but it does acknowledge that the current crop of likely GOP presidential contenders don’t include the exciting names conservatives want (e.g. Mike Pence, Chris Christie, John Thune).

Consequently, don’t be surprised if conservative activists and donors spend their time and money electing more senators like Rand Paul and Marco Rubio instead of backing whichever compromise candidate emerges with the presidential nomination.

NRO‘s Robert Costa has a great interview with Rep. Tom Price (R-GA) on the GOP Policy Committee chairman’s advice to colleagues:

“It is hard to remember that we are the minority party here in Washington,” Price says. “We run one-sixth of the federal government, and the person with the ace of spades, who can trump everything, is the president. If he wants it shut down, he’ll shut it down. My gut sense tells me that’s what he wants, and so we’ll have a shutdown, since the president wants to shut it down.”

Price believes that the GOP is ready to win the fight. “I think people understand that House Republicans have been the responsible body in all of this; that we are ones who have passed a bill to fund the government for the remainder of this fiscal year; that we are the ones who came up with a solution to keep this thing rolling, to keep our troops funded; and that our greatest ally in the Middle East has the resources it needs,” he says. “We are doing the right thing by standing our ground; that’s what we got elected to do.”

Let’s hope the GOP budget negotiators heed Price’s words and stand their ground.

Larry Kudlow has the best summary thus far on the importance of Rep. Paul Ryan’s (R-WI) pro-growth budget proposal:

The key point is not the actual numbers, but the direction of the numbers. Spending is coming down.

Trend lines are important in politics and in finances.  With Ryan’s budget plan, Tea Partiers may have found the details guy they need to make their rhetoric into reality.

The Maryland House followed the state Senate’s lead last night and passed a bill giving illegal immigrants in-state tuition rates for community colleges.  After graduating from a two-year school, beneficiaries would then be eligible for in-state tuition at four-year universities.

Maryland: so generous, it’s criminal.

Britain’s Telegraph says General David Petraeus may be nominated to replace CIA Director Leon Panetta, after the latter is tapped to become Secretary of Defense when Robert Gates retires.

If that happens, President Barack Obama will have kept not only former President George W. Bush’s people, but also his rationale for staffing key national security posts.  Gates’ last government job before Defense Secretary was as CIA Director.  Air Force General Michael Hayden led the CIA under Bush before Panetta took over.

Despite his campaign rhetoric, President Obama has continued the war in Afghanistan, and reversed himself on civilian trials for Guantanamo Bay detainees.  Now, it looks like the current president is adopting the staffing rationale of his predecessor too.

Somewhere in Texas, I’m sure former President Bush is flattered.

The Wall Street Journal reports that India’s explosive growth in college graduates isn’t translating into employment for millions of newly minted degree holders.  The biggest problem: lack of critical thinking and communication skills.

To compensate, companies are spending large sums of money coaching graduates into employability.  According to one Indian business executive, the problem is the credential mentality infecting education:

“How are you able to change the mind-set that knowledge is more than a stamp?”

Sound familiar?  American higher education too is tempted to treat knowledge-building as a service rather than a task.  When students are treated like customers, the link between effort and reward is broken.  The result is a certification that doesn’t translate into employment.

With half of India’s 1.2 billion population under the age of 25, up to a million new workers a month are estimated to join the labor force over the next decade.  If India continues down the path of graduating young people without critical thinking skills, those workers – and the growing Indian economy – will be in serious trouble.

Politico highlights how the budget battles between the Tea Party and Big Labor are threatening to shift firefighters and police officers into the Democratic Party, setting up a dilemma for fiscal conservatives.

The blowback from unionized first responders is being felt by Republicans in Ohio, New York, and Wisconsin.  In the latter, Republican Governor Scott Walker tried to exempt police and fire from the ban on public employees collectively bargaining, but they still refused to follow his order to remove protesting teachers from the state capitol.

Ironically, Politico quotes one police union leader saying his members are going to hold pro-union Republicans “accountable” for the cuts being made to balance state budgets.

Apparently, it’s a different kind of accountability than one based on sustainable funding formulas.  If the GOP is serious about reining in runaway government spending, it’s going to have to take on all public employee unions, and demand lower compensations (e.g. pensions, buy-outs, overtime, retirement eligibility, etc.).

We’ll see who has the stomach to make that case anytime soon.

Freshman Senator Marco Rubio (R-FL) is taking a much more traditional approach than colleague Rand Paul (R-KY) when it comes to proving his Tea Party credentials.  Paul continues to thumb his nose at the GOP establishment by founding the Senate’s Tea Party caucus, and feeding speculation he may run for president in 2012.

Rubio didn’t join the Senate Tea Partiers, and until recently has been publicly silent about his immediate intentions.  That changed with a recent column in the Wall Street Journal demanding major budget changes.

Interestingly, Paul is building a national brand while Rubio focuses on few – but profound – policy statements.  In an age of 24 hour media, Rubio’s statesmanlike approach could be an indication of very good things to come.

CNBC’s Fast Money quotes an investment strategist who says that when Federal Reserve Chairman Ben Bernanke gives his first press conference on April 27, his remarks “could induce a 10 to 15 percent correction” in the market.  Here, “correction” means “drop.”

The reason the market might drop one-tenth of its value in a matter of hours is due to some analysts’ fear that Bernanke will not continue printing money (i.e. quantitative easing) to inflate the value of assets.  When values return to more realistic levels, investors are likely to stop banking on government-distorted policies to bail them out.

The purpose of the Fed is to tinker with the money supply and interest rates to stabilize the economy.  So far, the only stability it’s guaranteeing is as fake as a free lunch.

Bloomberg reports that the rumored $33 billion in cuts being negotiated by House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) is looking like the key number both sides are working towards.  For perspective, that’s $28 billion less than the House of Representatives passed a few weeks ago, and $67 billion less than Republicans promised during last year’s mid-term elections.

When the $61 billion cut was passed, Tea Party-backed legislators accepted the reduction under the assumption that half a loaf is better than nothing at all.  Now, the loaf is down to a third, and activists are having none of it.

Whatever sum gets approved, it’s a sure bet the Tea Party and the members of Congress friendly to it won’t forget the importance of starting the cut threshold even higher next time.  At this rate, don’t be surprised if the 2012 battle cry is, “$500 Billion in Cuts or Fight!”

Indiana Republicans are expected to pass major school choice legislation in the next few days, allowing a family of four with incomes as high as $60,000 the opportunity to spend their tax dollars on the kind of education they want.

Here’s a perfect summary of the argument for public school vouchers from one Hoosier supporter:

“We fund education for a reason — to give individual children the skills they need to compete in life,” said Luke Messer, former executive director of the Indiana Republican Party who now heads School Choice Indiana. “If the money follows the child, parents ought to have the right to put their child in whatever opportunity they think would best serve their family.”

Vouchers put power into the hands of those most affected by choices about schools: families of students.  Let’s hope Indiana Republicans go to the mat for this one.

It’s been a while since former Rep. Charles Djou (R-HI) lost his reelection bid last November.  CFIF profiled Djou prior to his upset victory in a special election last May.  Now, it looks like Djou might run for a U.S. Senate seat, but only if former Governor Linda Lingle (R-HI) decides against it.

Of the two, Djou is the more conservative; especially when it comes to fiscal matters.  That said, either candidate would certainly be an improvement over retiring Senator Daniel Akaka (D-HI).

CFIF Senior Fellow Troy Senik takes President Barack Obama to task in a column for The Daily Caller today, arguing that the commander-in-chief has the power to bring down gas prices, but won’t.  Instead, Obama would rather enrich a semi-socialist state like Brazil while America’s economy sputters.

In fact, gas prices are up 67 percent since President Obama took office a little more than two years ago. Lest you think this analysis one-sided, during the same period in President Bush’s tenure gas prices increased by only seven percent.

Yet that doesn’t seem to bother President Obama much. Earlier this month, he said that we can’t drill our way out of our energy problems. That is like suggesting you can’t medicate yourself out of an illness.

Read the entire article here.

From Charles Krauthammer on the Right to Peggy Noonan in the middle, denunciation of President Barack Obama’s handling of the war in Libya is expected.  But tough talk from a reliable liberal like Eugene Robinson?  Now, that’s progressive.

Robinson has done his best to keep up with Obama’s ever-shifting views on military involvement in Libya.  No more.  Today, Robinson apparently can’t interpret the blizzard of mealy-mouthed talking points flying out the White House press office.  So, he’s asking for a little clarity:

So what the hell are we doing? I realize that President Obama and his advisers have answered this question many times, but I feel it’s necessary to keep asking until the answers begin to make sense.

What’s that you say, Mr. Robinson?  Obama isn’t making sense?  Welcome to the club.

When every opposition group voted down his austerity budget earlier this week, Portugal’s prime minister resigned.  Now, the European Union is preparing to bail out a third member nation in just over a year.  (The other two are Greece and Ireland.)

While the Portuguese mess probably won’t have an immediate fiscal impact on the United States, the EU’s crisis of federalism could soon be felt over here.

States like Illinois and California are teetering on the edge of insolvency after spending like a bunch of reckless European countries.  Because of the EU’s shared currency and the effects a default would have on the rest of the federation, the EU feels pressed into covering the costs of some members’ excess.

The same thinking seems likely to migrate across the Atlantic.  Members of Congress are mulling options like bankruptcy for failing state governments, though that risks undermining state sovereignty.  Also, bailouts run the risk of prolonging hard decisions, as well as deepening the dependency of states on the feds.

There are no easy answers, but there are some necessary decisions.  Time will tell if those in Sacramento and Springfield can come to better resolutions that the parliament in Lisbon.

A damning study that shows the true cost of President Barack Obama’s disastrous domestic energy policies:

The study, “Domestic Vendor Spending Outside the Gulf” found that approximately $1.3 billion of the $1.8 billion in shallow water vendor spending was concentrated in 7 states:

• Illinois: $376.2 million
• Pennsylvania: $245.0 million
• Wisconsin: $176.5 million
• New York: 139.6 million
• California: $138.0 million
• Oklahoma: 125.8 million
• Alabama: $104.5 million

Here’s what that means in political terms:

Additionally, the survey found a nationwide economic impact. Shallow water expenditures were made in 219 congressional districts — including 102 congressional districts with expenditures of $1 million or more, 32 congressional districts with expenditures of $10 million or more and 7 congressional districts with expenditures of $75 million or more.

Refusing to issue new permits for deep and shallow water drilling only increases the costs of gasoline and natural gas to consumers and destroys jobs across America.  Along with financial boondoggles like ObamaCare, the president’s willful refusal to increase domestic energy supplies is likely to be a huge liability in his reelection bid.

It’s nice to see liberal members of the Obama regime getting in a dust-up over whether the president’s Libya bombing is legal.

Today’s combatants are Senator John Kerry (D-MA), chairman of the chamber’s Foreign Relations Committee, and Senator Dick Lugar (R-IN) whose thinking on foreign affairs is usually in lock-step with Kerry’s.

Until, that is, President Obama forgot to ask Lugar’s permission before going to war.  As one of then-Senator Obama’s earliest Republican admirers, Lugar takes pride in his status as elder adviser to a young president.  Trouble is, Obama no longer needs Lugar for anything.

And as Lugar is finding out, that includes setting aside procedural niceties like declaring war or getting congressional authorization for military action. (Far better to go the Lugar-approved route of U.N. permission slips.)

Thanks, Senator.  He couldn’t have done it without you.