Sunday, July 31, 2011

Where Did “Red-Lining” Come From?....

In the 1980s one of the issues that “housing activists” used to sue banks for “housing discrimination” over, was a practice called “Red-Lining.”

Interestingly enough, that practice was the result of one of the earliest intrusions of government into the mortgage business.

During the Great Depression, the federal Home Owners Loan Corporation (HOLC), a New Deal agency established in 1933 by the Home Owners' Loan Corporation Act, decided that America’s banks needed improved mortgage lending criteria and created what came to be called “Residential Security Maps” for every city in the United States.

The HOLC had over 40,000 people grading each neighborhood’s fitness for loans on a scale from A to D.

To accomplish this, the HOLC relied on hard (numerical) data, mostly in the form of housing statistics and local economic data to determine each community’s grade.

As Joe Flood (author of The Fires) noted, “...the maps became an early warning about the weaknesses of the kind of centralized, statistical decision-making that would come to dominate American government and business in the ensuing decades, as complex issues were reduced to a handful of the most easily obtainable and often misleading statistics.”

Those Residential Security Maps of the HOLC became the basis for and the foundation of the practice of “Red-Lining.”

Ironically enough, planners thought that those Residential Security maps would lead to slum clearance and urban renewal, but they resulted in the expansion of the slum, in practice.

In fact, no issue has been more abused than claims of “discrimination.” It was “discrimination lawsuits against traditional lending criteria that allowed both HUD and the DoJ to litigate American banks to cease using “traditional lending criteria,” because they “discriminated against low income Americans.”

U.S. law won’t permit banks to treat well-off borrowers any differently than they treat lower income borrowers, so traditional lending criteria CAN’T be used ONLY with more affluent borrowers. Neither can American banks charge higher fees and interest rates to higher income borrowers to make more loans available to lower income borrowers, by offsetting its riskier loans with higher rates and fees from more reliable and stable borrowers.

Andy Cuomo called the government’s abuse of the U.S. banking industry and forcing MORE subprime loans (loans to sub-prime borrowers) “affirmative action in lending.”

Moreover, Janet Reno’s mentee (Eric Holder) is looking to do the very same thing TODAY in the wake of the disastrous results of the last attempt at this;

“In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for low income Americans with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD...

“...Settlements include setting aside prime-rate mortgages for low-income Americans with blemished credit and even counting “public assistance” as valid income in mortgage applications.

“In several cases, the government has ordered bank defendants to post in all their branches and marketing materials a notice informing low income customers that they cannot be turned down for credit because they receive public aid, such as unemployment benefits, welfare payments or food stamps.

“Among other remedies: favorable interest rates and down-payment assistance for minority borrowers with weak credit.”
That’s exactly the kind of litigation that forced banks into poor (subprime loans) last time and it indicts Holder now.

The court’s ruling is flawed and forces banks to comply with flawed policies that once nearly destroyed our economy...and the start of these subprime abuses (mandating banks to lend to more sub-prime borrowers) started with the federal program (those Residential Security maps) that became the foundation of what would come to be called “Red-Lining.”

Friday, July 29, 2011

Why Journalists and Commentators Must Define Their Terms....

There’s a huge argument over income and taxation that’s been going on for a very long time.

The problem is, as we ALL know (yes, even journalists and commentators know this), income is NOT the same as compensation, nor should they be.

While ALL income is compensation, NOT all compensation is income.

Chris Matthews repeated a long-standing lie the other night and in his case, I’ll admit that I can’t be sure if Matthews knows the difference between compensation and income. I’ve met Mr. Matthews and he does not tend to strike one as a deep thinker, to say the least.

Still, he claimed, as Mr. Buffett had many months ago, that “Many CEO’s pay a lower tax rate than their secretaries.”

That’s clearly and demonstrably untrue.

Few, if any CEOs earn less than Costco’s Jim Sinegal ($400,000/year) and few, if any secretaries earn over $50,000/year. The tax rates on those incomes is vastly different AND the tax rate for the CEO is substantially HIGHER.

Of course, most major executives are NOT primarily compensated with income. They get stock options, and are often even able to buy additional shares at a very low “insider’s price.”

A CEO who was given 100,000 shares of stock as a compensatory “stock option, now valued at $50/share, has been given an additional $5 MILLION in compensation. If he keeps that for two years (and he WILL), he’ll pay the prevailing Capital Gains tax on that stock – 15%, which IS lower than the secretaries income tax rate.

And it SHOULD BE! NO ONE has ever argued that ALL compensation should be taxed equally. Not one such argument has ever been made.

What’s pathetic is seeing the likes of Warren Buffett, a member of the group that lobbies for LOWER Capital gains taxes on investments, making such ridiculous claims that confuse common income with legitimate Capital Gains based compensation.

There are also other, more nebulous ways that certain positions get around the income tax. Private equity funds, venture capital funds and hedge funds all use a “points system,” by which managers don’t take stocks and hold them, but convert their commissions into “points” and then hold them, claiming those as Capital Gains!

My wife has worked on some Hedge Fund clients and seen mangers with portfolios of over $100,000,000 in “points,” that will be taxed as Capital Gains.

Now THAT practice of converting commissions from managed investments into “points” that the IRS (the government set that loophole up, NOT any fund managers) devised CAN BE changed with the stroke of a pen.

Jeffrey Carter of the CME Board defends the points system this way; “Let’s say you set your fund up and it’s a 2.5%/20 fund. This means that you will collect a salary of 2.5% of the value of the fund, the money raised, and you will collect 20% of the growth of the fund if it’s successful. If it’s unsuccessful you get nothing. Assume a ten million dollar fund just for fun. As you know, sometimes these funds are in the billions. The manager of a ten million dollar fund will make the magical amount of $250,000/yr. That money ought to be taxed at the highest rate because they is guaranteed that salary. There isn’t any risk once the money is raised."

“An aside, it’s not easy to raise money. Not just every Tom, Dick, or Harriet can raise a fund.

“On the 20% gains any manager ought to pay only 15%, or whatever the capital gains rate is. Why? Because the fund manager is using his talent to take a measured risk. Not all these deals work out, not every trade a hedge fund makes works out. Hyde Park Angels, my angel group in Chicago, did some research and found out some of the best funds make all their money on two deals. The rest of the deals they invest in go broke.

“Wall Street and Greenwich are littered with the remains of busted hedge funds, and fund of funds. Silicon Valley and Boston have had plenty of Venture Capitalists go belly up. Leverage buyout and Private Equity firms go out of business too.

“If America wants venture capital, and other risk loving funds out there, then they can’t overtax them. They provide much needed growth capital to really big businesses. The backbone of the internet you are reading this blog on was financed by some risk loving venture capitalists. So was most of the software you use. Tax risk capital at a high rate, you will have less of it. It means less growth, lower GDP, higher unemployment.

In other words, Carter argues that those who guide those investments are also creating a legitimate Capital Gain and that their skill-sets and the commissions derived from those SHOULD BE taxed at the Capital gains rate.

However, Berkshire Hathaway Vice Chairman, Charles Munger vehemently disagrees with Carter over "points" (commissions)  being allowed to be taxed as Capital gains. "I think the idea that the hedge fund manager gets lower taxes than the taxi driver or the physics professor is insane. The legislators who leave that policy in place are derelict in their duties to be rational and fair. There are plenty of them in both political parties. It's totally outrageous.

"Hedge funds treat the money that's really paid to him for management [as a deferred capital gain.] It's the equivalent of doing your work [points to journalist]. You pay ordinary income taxes, and they pay 15%. Or even less than 15%, which is not quite understood! There's a lot of untaxed appreciation that accretes to them with no taxes at all.

"The situation is crazy. Yet these people make political contributions and they wrap themselves in the flag of enterprise, and we end up with hedge fund managers who have what you and I would call ordinary income taxed way lower than the income of a taxi driver. It's totally outrageous.

The ONE area hopefully everyone CAN agree on is that should higher tax rates lead to LESS investment in critical areas, then government in ANY form must be barred from filling that void.

Otherwise that might serve to undermine the Capitalist system’s foundation (independent investment and the private ownership of property) while supporting the foundation of the failed Command system (government direction of both investment and industry). The world’s already been littered with the carcasses of such failed experiments (Bulgaria, Albania, the former USSR, etc.).

Monday, July 25, 2011

Anders Behring Breivik’s Assault on the Global Corporatist Culture!....

The hideous murder of 76 innocent Norwegians by the anti-globalist terrorist, Anders Behring Breivik (pictured above) is a VERY BIG DEAL, not only on account of the staggering death toll, most of them teenagers, but because it seems to evidence something that global Corporatists didn’t believe really existed – actual, serious resistance, especially among ethnic Western Europeans. That’s NOT a good thing from their view. So, ultimately this is a story about all of us having to change and adapt to the NEW and still forming global culture.

In a statement Anders Behring Breivik said he’d carried out the attacks because he wanted to "save Norway and Western Europe from a Muslim takeover". He accused the Labour party of "mass imports of Muslims."

Unfortunately for those like Breivik, it isn’t only the Labour Party or "the left" that’s complicit in the mass immigration he sees changing his country and his culture, it’s every political Party in Norway, because EVERY political Party in Norway, like every political Party everywhere is funded by and beholden to its own global (multi-national) Corporate interests and the global Corporatists have a plan in place and it’s going to be cemented in place, come what may.

There’s a very difficult transition going on and it’s going to get even more difficult as we try to merge a number of fundamentally different moral systems into as much of a “unified whole” as possible.

BUT the die has already been cast. Long ago, the Corporatists of the West saw the very simple math that it would be better to sell to 5 BILLION customers worldwide than to the 1 BILLION in the industrialized West.

But to do that, wouldn’t be easy. A plan had to be devised to not only “Westernize” the developing world, but to somewhat “de-Westernize” the West!

That was accepted as the most effective way to achieve those aims over the shortest haul. So, starting in the 1960s America and Western Europe radically changed their immigration policies and allowed millions to flee Third World poverty and come to those industrialized lands. At the same time, Western companies were changing the very cultures and languages of those in the developing world.

It’s a brilliant strategy, but even this one is not without some pain and dislocation. Like any kind of major transition, this one is fraught with much dislocation and human misery.

In America, most people know absolutely nothing about Scandinavia. The most misinformed think it’s some kind of “democratic socialist utopia,” when nothing could be further from the truth.

One Swedish blogger puts the cultural question into a pretty poignant perspective with, “Very few of the Swedes does not understand English. Some of us might not speak Swedish! Not even those who are born here. . .”  (Pela)

Pela is even more stark about Sweden’s new multi-cultural crime stats!

The following Swedish crime stats come from Sweden’s National Council for Crime Prevention:

. In 2003 New York City had: 591 homicides - Sweden had 189.

. NY City had 1,789 rapes - Sweden had 2,565.

. NYC had 18764 aggravated assaults - Sweden had 65175.

. NYC had 29207 burglaries, Sweden had 122700.

. It should be noted that NYC has almost 1.5 times the population than does all of Sweden, so to accurately compare Sweden’s stats to New York City’s you have to multiply our numbers by 1.5X!

Pela asks, “If Sweden were a city; where would you choose to live?

“And I promise you that the numbers have not gone down here since then!”

Pela notes: ("About the murder rates- you have to keep in mind that it is very hard to get someone convicted for murder here in Sweden. Most killers are just sentenced for manslaughter and those convictions are not listed under homicides.")

Certainly any reasonable person could see where that immigrant-fed crime wave would be at the very least “disconcerting,” to traditional, native-born Swedes like Pela.

In Norway they have a very similar “Muslim issue.” In Norway, one moderate Muslim scholar Mulla Krekar, who’d long been very dismissive of Osama bin laden and other radicals, switched his views in 2009 claiming that “Muslims in Norway need their own state,” and that he hoped that Osama bin Laden, or another like-minded radical Islamist leader would become the head of  Islamic super-state.

To be sure, Westerners are NOT going to embrace an Islamic/Sharia moral code, one that stones gays and adulterers to death and doesn’t allow women to drive cars or go out in public unescorted, BUT be sure that Muslims are also NOT going to accept today’s excessively open and liberal Western morality either.

Some accord will have to be brokered. . .and THAT’S really what all this comes down to. There WILL BE resistance, but that resistance WILL BE put down, by media and by governments, all of whom are beholden to the same global Corporatist interests.

Suffice to say, most global corporatists are very aware of their own “preconceived Western biases,” and feel that their initial impulses should be to make the non-Western world feel as “welcome” in this new global marketplace as possible.

That DOES NOT mean that the West will ever have to accept the barbarous abuses of Sharia law, BUT it DOES mean that the West’s current acceptance of things like adulterous promiscuity, open-relationships, homosexuality and female immodesty will have to change and probably change somewhat radically from what many in the today’s West find acceptable.

Right now, it’s traditionalists who want to cling to their old cultures who are most dislocated, but mark my words, soon it’ll be the most liberal people of the West and the most radicalized/fundamentalist people in the Arab-Muslim world who’ll be the most dislocated and prone to lashing out.

BUT ultimately the corporate globalists will win. Come what may, THEY will win out. They’ve been playing chess for fifty-plus years, while the rest of the world was playing checkers.

Ultimately, no matter how much any of us resists, we’ll ALL eventually become members of a NEW globalized culture prepackaged for us by the same global Corporatists that sell us breakfast cereals and Coke!

Saturday, July 23, 2011

Can We be Saved...From OURSELVES?...


Recently we were treated to the DSK “outrage” – a pompous, self-important “world leader” allegedly feeling entitled to “do as he would” with a lowly hotel maid in New York City.

The American media blared its outrage, “How dare this autocrat think he could force his will on another merely by dint of his station or position?”

REALLY, America?!

Try looking in the mirror once in awhile!

We are today a nation that is entrenched in the very SAME “entitlement ethos” that infects Mssr Kahn.

America’s seniors feel “entitled” to a retirement and increasingly expensive medical benefits paid for by everyone else (“the little people”). Public sector workers feel “entitled” to generous pensions and medical benefits also paid for by everyone else (again, “the little people”).

Some of it comes down to “two ways of viewing the world,” HOWEVER, contrary to what some folks claim, BOTH views are not and CANNOT be true at the same time;

The liberal view that, “Everybody needs to step up to the plate and contribute to erasing the deficit, rather than rob money from Medicare to pay off the deficit, taxing the rich is the much better way to go," couldn't be more wrong!

Even a cursory look at the above graph clearly shows that the top 10% of income earners in America pay 68% of all income taxes on just 44% of the aggregate annual wages.

The bottom 50% of wage earners pay just 3% of all income taxes on 13% of the annual aggregate income.

Fact is, “It’s the BOTTOM 50% of income earners who are UNDER-TAXED!”

We have too many Americans in for a free ride.
People are living longer and healthier, so the social security and Medicare eligibility ages should be raised and we need to drastically CUT federal, state and local/city budgets and workforces to spur REAL job growth in the private sector.

EVERY single government job is paid for by private sector revenues, so we NEED to keep government workforces SMALL, so the private sector can expand and grow the economy.

That's why liberal calls for "tax the rich," ALWAYS fall hardest on those earning the least!
As Ronald Reagan said, "It isn't that liberals are bad people, it's just that they know so much that simply isn't so."

Tax Policy as Social Control and the Fallacy of Finite Wealth....

Too often tax policy is sold to people as, “a means to benevolent social control.” So called “sin-taxes,” are said to be deigned to limit people’s exposure to harmful vices, like smoking, excessive drinking, even sweet snacks.

Others are designed to do things like “make driving more expensive and inconvenient,” so people pollute less.

All of those ideas are too simple-minded because they (1) misunderstand the problems they intend to try to solve and (2) don’t take into account nearly enough variables.

Some even argue that “tax breaks” and “tax abatements” are “social programs” in the form of “pay offs that benefit the well-connected” and that they actually harm others who don’t get them.
That’s as short-sighted and simplistic as the idea that “there is only so much wealth to go around, so a wealthy individual creates many poor people by hoarding so much of that finite resource for themselves.” THAT could ONLY be true IF an economy was static, with a fixed amount of wealth within a closed system. BUT no economy is a closed system, every economy is an open, dynamic system, in which the more wealth one accrues, the more wealth is produced, thereby expanding the economy AND the amount of wealth available to all.

Of course tax breaks are neither social benefits (legalized bribes) nor “social programs” UNLESS government or “the people” have a right to all the proceeds produced in their communities.

They DO NOT.

There is no such “chicken or egg” argument when it comes to commerce and government.

Commerce is not only the sole purpose government came into being, but the sole purpose language was developed, as humans sought a way to communicate in order to make exchanges. Likewise, math, in fact numbers themselves were developed solely as a medium of exchange.

Governments arose out of the necessity to protect commerce from both foreign invasion and domestic strife. Certainly well-off merchants COULD provide their own security/protection, but that often led to armed conflicts over business locations and prime trading routes. Governments arose out of the desire to make commerce more orderly and less violent.

Moreover, WHAT are taxes on businesses other than de fact sales taxes?

That is indeed what they are.

Every levy heaped upon business raises the costs of production and thus the price consumers pay for those goods.

Business PAYS NO TAXES, they simply pass along ALL their costs onto their consumers, as they MUST and as they SHOULD. So, in the end, piling on taxes on businesses amounts to taxing ourselves!

Thursday, July 7, 2011

Jacob Riis and the Failure of Good Intentions and Social Engineering...

Pete Hamill, one of New York’s many working class liberal pundits from two generations ago, once said, “New York’s, or then, New Amsterdam’s good fortune was that it was started by a company, the Dutch East India Company, not run by a religious sect, not a king, but by a company.”

What set New Amsterdam/New York from aristocratic Virginia and Puritan New England was that it’s sole purpose for being was the boundless pursuit of money.

That founding ethos brought forward a number of noble virtues, primarily and specifically the willingness to take in anyone that was good for business.

Within a few short years of its founding, no less than 18 languages were spoken on the streets of that city.

It was the pursuit of wealth, not human nature, nor government decree that ALLOWED such a tolerance, just it allowed the slave trade to flourish there, while also allowing masters, seeking a better return on their investments to train slaves as skilled craftsmen and to offer them freedom, in return for cheap labor and hard work.

This ethos flourished past Dutch rule, through the Colonial times and very much into the dawn of the modern day.

New York took in immigrants by the millions, Chinese, Jews, Russians, blacks from the south and the West Indies, Italians, Turks, Irish and Poles. By the late 19th Century new York was the world’s largest and greatest economic engine.

Today, Russia and India are utilizing cheap labor free-for-all economics to create the same kind of dynamic economic growth. China has been able to move 100 MILLION Chinese out of poverty EVERY YEAR through its market-based economic reforms.

At the start of the 20th Century one reporter observed, “Every four years, new York adds to itself a city the size of Boston or St. Louis. It is the largest Jewish city in the world, the largest Irish city in the world, one of the largest German cities. More than 700,000 Russians call it home and it houses more Italians than Rome. New York is the great whirlpool of the races.”

Generations of poor people flooded into New York to provide the cheap labor it needed, often working in appalling conditions, to give their children better opportunities. Milton Friedman’s mother was a seamstress in a Lower East Side sweatshop and she toiled so that Milton would never see the inside of one.

And these sweatshops created unheralded opportunities for these poor. People who would’ve been peasants, serfs, veritable slaves and “human garbage” under Monarchs and dictators, were free people, able to leverage their own labors into a better life for their children.

Entire generations went from peasant-class to property owners in a generation, thanks to the “miracle that was New York.”

But that same success also spawned the impetus for the move from unfettered freedom and toward a more regulated, more government controlled economy. Ironically enough, the trigger for this shift came in the form of New York’s cheap housing – it’s slums.

Jacob Riis (pictured above) came to New York a penniless Danish immigrant, but given that he had a working understanding of English, along with some marketable skills, including familiarity with the new flash-powder photography, he was able to land a job as a police photographer and move out of the slums after a few years here.

In 1890 Riis put together a pictorial of New York’s slums in all their horrors and penned some compelling stories that outlined the magnitude of the issue, not merely a few malnourished or diseased kids on Delancey Street, or some hardened thugs around what was then called but “Bandit’s Roost,” but a population spread over 37,316 tenements that housed over one and quarter MILLION (1,250,000) New Yorkers.

This book, “How The Other Half Lives,” catapulted Jacob Riis into national and eventually international acclaim.

New York City’s leading social reformer at the time was Teddy Roosevelt, then U.S. Civil Service Commissioner and he devoured Riis’ book with fascination. When Teddy Roosevelt became New York’s Police Commissioner a few years later, Jacob Riis implored him to shutter the brutal police department-run lodging houses, where Riis himself had sought shelter upon his arrival.

In fact, Riis began working with many upper class housing reformers, who ultimately were able to convince the city to engage in some of the nation’s first active “slum clearance movements.”

Riis, with Teddy Roosevelt’s assistance was able to get some of the country’s first tenement regulations passed through Albany.

Across New York City, slum housing, rookeries (old, dilapidated mansions and warehouses, illegally set up for lodgings) and the police department’s lodging houses were closed down and cleared away and the lands were either sold off to developers (mostly from among that same group of upper class social reformers) or turned into parks.

The SINGLE “modern” (more human) lodging house that Commissioner Roosevelt built was unable to house more than a small fraction of the hordes of the now homeless and dispossessed poor. This created what’s been called, “A veritable refugee crisis on the Lower East Side of Manhattan,” as slum clearance forced many onto the streets, as those slums had housed those who simply couldn’t afford a better place to stay.

As this drove a teeming throng into the already overcrowded tenements that were left and into Bowery flop houses, usually situated above bars, Riis blamed saloonkeepers “for plying the poor with cheap drink and shelter”. . .BUT, they’d been doing that for eons. It was, ironically enough, Jacob Riis and TR’s misguided plan to improve housing conditions that actually drove the crisis.

When the Columbus park project was completed and some 10,000 homes were converted into a lush, green park, Riis called it, “Little less than a revolution,” a slum housing was razed and “in its place come trees and grass and flowers, for its dark hovels, light and sunshine and air.”

An improvement for the middle and upper classes who enjoyed the park, and reveled in the eradication of that urban blight, but a disaster for the displaced poor.

Like many misguided social reformers, the reforms proposed by Riis and Roosevelt transformed the LAND itself, but did nothing to help and much to harm the poor whose name these reforms were done.

Around the same time that Progressive housing reform (“slum clearance”) was underway, the same “Progressive forces” took aim at the jobs those poor people relied on. The Triangle Shirtwaist fire, which occurred on March 25th, 1911 created the impetus for massive workplace reforms.

By the time Woodrow Wilson took office as President, not only had the homes of the poor in new York city transformed for the worse by the patronizing pity of the rich, so were their livelihoods.

A part of the issue wealthy, well educated people have in understanding and really sympathizing with poverty is that even those who’ve experienced briefly never possessed any of the internal or intrinsic causes of poverty – physical or mental infirmity, a lack of marketable skills or a language barrier. In the case of Jacob Riis, he came to New York a young, well-educated, middle class, Protestant Danish immigrant, who spoke at least some English when he arrived here. For Riis and those like him, simply removing the trappings of poverty, gaining employment and finding better lodgings was all they had to do to put the external effects of poverty behind them.

As a result, Riis and others felt it HAD TO BE the same for all the other poor, even though it wasn’t, which is why his view that “If you get rid of the slum, you get rid of poverty” was so disastrous when translated into public policy.

The Progressive ideal first championed wholesale by Teddy Roosevelt came out of the desire of the established wealthy patricians to maintain their positions.

In social and economic cauldrons like New York’s they saw a furnace that forged “sharks,” with new ideas and ruthless determination and the ability, IF left unfettered, to displace the established order of things. . .to replace the established businesses and industries with newer ones.

That AND New York’s upper classes saw that the wretched poor, the factories and sweatshops that supported them and the tenement slums that housed them took up would could and SHOULD be valuable real estate.

As much as anything the Progressive movement was motivated by greed in the form of a land grab by some of its more prominent constituents. The Morgan and Vanderbilt controlled New York Central Railroad, which owned the industrial land along Manhattan’s Hudson River side, sought to transform that industrial landscape into more high-value office space that could be built higher than industrial spaces could, thus generating much higher rents.

These patricians formed what was then called the Regional Plan Association or RPA and they immediately gravitated to the idea of planned communities, or “Urban Planning.” FDR’s uncle, Frederic Delano was the RPA’s first chairman.

Their plan at the start was to move New York’s industry and its teeming mass of lower class, working poor across the Hudson. The only thing that kept the RPA from moving those things immediately was the pesky fact all that “teeming confusion” was the basis of the city’s economy. It would have to be done over time, as New York would transition to a newer, less industrialized economy.

Robert Moses (NYC’s “Master Builder”) became an integral part of that plan that continued after WW II. Robert Moses benefitted from a number of pieces of national housing legislation. The first was the 1937 United States Housing Act, which was the nation’s first public housing law. It sprang directly from New York City’s housing reform movement and was often called “the Wagner Act,” after its primary patron, NY State Senator and Tammany Hall legend, Robert F. Wagner Sr. Within a few decades public housing projects were strewn across cities throughout America. Those concrete slab housing projects housed over 500,000 people in New York City alone!

However, Moses came to rely on the 1949 Housing Act even more than its predecessor. That law allowed him to use federal funds to condemn and clear “slums” and sell off the land to private developers on the cheap.

Robert Moses developed the system of highways and bridges that crisscrossed New York City connecting it with Long Island to the East, the upstate mainland to the north and New jersey and points west, while in the process, the man who would never drive a car himself created that highway system by tearing apart and separating once tight knit neighborhoods, in effect, dismantling the last of the pre-FIRE takeover of New York city.

By the mid-1960s, the FIRE (Finance, Insurance and Real Estate) economy was in place and pretty much dominated New York. The Rockefellers (owners of Chase Manhattan Bank) led a consortium of FIRE business leaders. One of their major projects completed much of what the RPA wanted done. The World Trade Center complex eradicated lower Manhattan’s famed “Radio Row,” which housed scores of small factories, electronic appliance dealers and repair shops and quickly moved them and all those jobs out of the city.

By the late 1960s New York had ceased being a major commercial port, as the FIRE industries DID NOT rely on large quantities of goods brought into the city daily, so thousands of Long Shoreman and Teamster jobs were eradicated.

The “Progressive agenda,” as played out in New York eliminated the unheralded opportunities for upward mobility among the teeming throng of working poor who’d poured into that city for generations, eradicated their cheap lodgings, the factories that employed them and replaced New York’s once bustling, dynamic economy with a staid and static FIRE economy, one which oddly true to its name would play a part in the coming “fire storm” that cleansed new York of the last vestiges of what was before.

The primary impetus for the “progressive agenda” was self-protection for the upper classes and the chance to rake in windfall profits from the clearing of slums and factories and the conversion of those lands into vehicles that better benefitted New York’s patrician class.

That’s why Progressivism and the Keynesian economics that was its hallmark is a Country Club Republican ideology, endorsed by the likes of J. P Morgan, Bernard Baruch and the Rockefellers.

Progressivism transformed dynamic old New York with its teeming factories and myriad industries and commercial hodge podges into the well coifed and more exclusive and far less dynamic FIRE economy of today.
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