Morning Report: The CFPB updates the QM rule

Vital Statistics:

 

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S&P futures 3638 -22.3
Oil (WTI) 46.81 0.04
10 year government bond yield   0.89%
30 year fixed rate mortgage   2.80%

Stocks are lower this morning on fears of a nasty Brexit. Bonds and MBS are up.

 

The FDA is working aggressively to get Pfizer’s COVID-19 vaccine approved for emergency use.

 

The CFPB updated its QM rule by going with a price-based rule as opposed to strict DTI. Essentially, the new rule compares the rate on the loan and compares it to the average prime offer rate (APOR) of comparable transactions. If the rate is higher by less than 1.5%, then it is QM. If it exceeds the APOR by 1.5% – 2.25%, there is a rebuttable presumption that the borrower has the ability to repay.

“Through this General QM Final Rule, we are working to create an appropriate, more flexible General QM loan definition,” said CFPB Director Kathleen L. Kraninger.  “Our final rule’s price-based approach strikes the best balance between assessing consumers’ ability to repay and promoting access to responsible, affordable mortgage credit.”

 

Inflation at the wholesale level remains below the Fed’s target. The Producer Price Index rose 0.1% MOM and 0.8% YOY. Stripping out food, energy, and trade services, it rose 0.1% MOM / 0.9% YOY.

55 Responses

  1. In the bizarre world of Republican politics:

    Welcome to the Countdown Journal. There are three (3) days until the Electoral College votes, and then 40 days until the Inauguration of Joe Biden.

    A reminder that Texas’s frivolous, clownish, anti-democratic, “seditious abuse of the judicial process” is going nowhere.

    But it felt like a landmark moment in the ongoing deracination of conservative principles when 18 states and a majority of the Republican congressional caucus signed on to the attempt to nullify the votes of tens of millions of Americas. (BTW: here is a thorough fact check of the five conspiracy theories in the Texas attorney general’s lawsuit.)

    Over the last years, we’ve grown used to disillusionment and soul-crushing disappointment. But what do we make of this slouch toward raw authoritarianism?

    Jonah Goldberg notes that the Texas lawsuit “is a betrayal of everything defenders of federalism and the Electoral College claim to believe.”

    The decision by Republicans to embrace the attempt to steal the election, he writes, is “an act of cynical, unpatriotic, undemocratic hypocrisy unrivaled in American history, a pure power play on behalf of a president whose disregard for the very Constitution these people have long claimed to adore is total. It is shameful. Infuriatingly shameful.”

    This, however, is what happens when a political party transforms itself into a cult of personality — it becomes willing to jettison almost everything, including the constitution, democracy, and the country.

    All the things that used to matter? Pffft.

    Fiscal conservatism? Character? Free trade? The rule of law? American leadership in the world?

    All that’s left is an orange smudge. But, apparently, we are not done yet.

    As TrumpWorld pushes for the Supreme Court to wipe out the results of a presidential election, we can also forget about notions like “judicial restraint,” and “strict constructionism.”

    And federalism. And states’ rights.

    Until five minutes ago, conservatives understood that states ran their own elections and that it was unconstitutional for the federal government or the courts to override those systems except in the most extreme circumstances.

    But what use is a principle if it doesn’t serve the needs of the Orange God King?

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    • lms

      All the things that used to matter?

      Matter to who? Certainly not any progressive I have ever seen!

      But what use is a principle if it doesn’t serve the needs of the Orange God King?

      If the progressive left can operate from a complete lack of principle – as it always does – why shouldn’t the right?

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    • To me the interesting question is who will be able to convince the right that this wasn’t a fraudulent election?

      The media has no standing to do that. Neither do any D pols.

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      • Nobody. And frankly, you’re going to have a hard time convincing most folks on the right that the media wasn’t a full and willing and cognizant participant in the election fraud and subsequent coverup. I think however it settles from the courts, the right will accept (especially if Trump goes: “It was stolen, but I’ve done all I can playing by the rules, so you’re going to get Biden now”) and the new normal will be accepted, generally, but most folks on the right will think the election was stolen because it 100% looks like it was stolen, even if the evidence isn’t actually that strong. The optics are bad.

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      • As Taibbi notes, their attempts to suppress the dissent will likely backfire.

        “If you want a population of people to stop thinking an election was stolen from them, it’s hard to think of a worse method than ordering a news blackout after it’s just been demonstrated that the last major blackout was a fraud.”

        https://taibbi.substack.com/p/the-youtube-ban-is-un-american-wrong

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    • Wait until the next Republican POTUS is considered The Worst and Trump gets the current GWB fondness.

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      • I think the next Republican POTUS will get a lot of “He’s as bad as Trump! He’s a Trumpista! He’s Trump’s avatar!” kind of stuff from critics, while right wing neocons will be making the argument that he’s NOTHING LIKE TRUMP. He doesn’t tweet and a lot more wars being funded, so this new GOP Potus is aces!”

        I don’t think fondness for Trump comes around (from the certain circles–there are still lefties who consider Dubya, H.W., and Reagan all Literally Hitlers) until we’re a few presidents down the road and I’m on my deathbed.

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    • A reminder that Texas’s frivolous, clownish, anti-democratic, “seditious abuse of the judicial process” is going nowhere.

      Trying to decide who the president is is not precisely frivolous. Given the state of things, I really don’t see it as seditious–I think at best it is, in fact, principled and at worst (more likely) it is political, in a way all things were. Certainly no more seditious than the collusion narrative asserted when Trump won. And if there had been enough there to take it to court, I’m sure they would have.

      But it felt like a landmark moment in the ongoing deracination of conservative principles when 18 states and a majority of the Republican congressional caucus signed on to the attempt to nullify the votes of tens of millions of Americas.

      Eh . . . I guess. Although a lot of this process has been an argument about whose votes get nullified, either through court machinations or changing election rules at the last minute (or post facto). Which approach is bad nullification and which is good is primarily decided by which side is doing what, in my observation.

      But what do we make of this slouch toward raw authoritarianism?

      Not at all sure how this is authoritarianism. Mask mandates, lockdowns, arbitrary rules for one group but not another based on no discernible standard or science? That could be seen as authoritarianism. Filing lawsuits and playing politics (and getting others to play along) seems more like kelptocracy. Or plutocracy. You’ve got different plutocratic factions battling. The authoritarianism comes after the winning.

      Jonah Goldberg notes that the Texas lawsuit “is a betrayal of everything defenders of federalism and the Electoral College claim to believe.”

      Fair, but also this sort of thing can be said of decisions made for political convenience by both sides, all the time. This flip-flopping on principle based on convenience is very much a human behavior.

      This, however, is what happens when a political party transforms itself into a cult of personality

      Also fair. But it’s not only when that happens. When the transform into a cult of ideology, it can be the same if not worse.

      Fiscal conservatism?

      No elected politicians of either party truly embrace that.

      Character?

      As opposed to who? Biden is a swamp creature. Harris kept likely innocent people in jail so California could have what essentially amounts to for-state-profit slave labor. Trump is a philandering, narcissistic asshole. Don’t get me started on Bill Clinton.

      Free trade?

      I think that’s a thing that would take a lot of unpacking. Did we have freer traded before Trump? Will we have freer trade with Biden? Is free trade really a principle? Is it free trade with other countries artificially manipulate prices or tax your incoming goods while you give them unfettered access to your market? The idea Trump is just awful on trade from a conservative perspective is . . . complicated.

      As TrumpWorld pushes for the Supreme Court to wipe out the results of a presidential election, we can also forget about notions like “judicial restraint,” and “strict constructionism.”

      What has happened so far? What will the court likely do? The narrative moves from factually-in-the-ballpark to speculative fear porn. But . . . pundits.

      Until five minutes ago, conservatives understood that states ran their own elections and that it was unconstitutional for the federal government or the courts to override those systems except in the most extreme circumstances.

      And in 2016 a whole lot of folks on the left thought bribing or cajoling electors to be faithless and vote Hillary in instead of Trump was perfectly acceptable, indeed a patriotic obligation. Maybe the writer did as well. There was a lot of that, before certification.

      Everybody does the same shit, because they have the permission structure to do whatever so long as it’s their side. Then it’s reasonable. If this situation was reversed at Biden lost in questionable circumstances and was pursuing this route, this SAME GUY would be opining that it was a necessary tonic to a corrupt system would re-elect an Orange Authoritarian like Trump, while the very people who are all about “fixing the fraud” would be crying that Biden was conducting a coup.

      It’s just how it works.

      But what use is a principle

      We don’t really have a culture that teaches or rewards or pushes principle, so from a broad perspective principle is not going to guide enough people to make that much a difference. And then you have principled people whose principles move them in opposite directions.

      Also, people who hate you are often not the best judges of what your principles actually are. But that’s another topic.

      The rule of law?

      And yet the right still seems to remain more interested in the rule of law than the left.

      American leadership in the world?

      How people define “leadership” varies.

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      • I guess we all knew that was going to happen. That’s why I don’t understand why so many R’s signed on……….it was ridiculous at the start.

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        • Can you believe it? Trying to win an election by disqualifying votes? Unheard of!

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        • lms:

          it was ridiculous at the start.

          No more ridiculous than Hawaii’s claim to have standing to sue over Trump’s immigration policies…which they were granted.

          BTW, what is your view of the Russian Collusion Hoax?

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        • The Supremes stated the threshold burden that Texas could not meet: it had no standing to challenge an electoral process in another state. This avoided any political implication and did not open the door to any broad new precedent. It restated the obvious. The Court did not order any sanctions and I did not think it would, although I simply do not know whether there is an analog to Rule 11 in original proceedings.

          lms, so many Rs signed on rather obviously in fealty to DJT’s voters in their states. I do think that displays an unprecedented level of cynicism. There really are no historical parallels to this attack on elections without evidence. We have had many serious court battles over close elections and voter fraud in America, but none previously in which the challenger could not raise any evidence in any state in any proceeding in elections that were not actually within the margins of miscounting errors. This is a whole different mind set and one that I hope will recede into ancient history rather quickly.

          I do not mean to suggest there were no possibilities of error and/or fraud, only that there was no evidence raised, which is the glaring distinction from historical challenges. Errors are always possible. But to have a fraud free guarantee of sorts will take embracing the Carter-Baker reforms first suggested in 2005. There were 87 specific suggestions. One, real photo ID, drew the fire of the left. Here was the joint response of Carter and Baker to the critics.

          At one time I had a copy of the entire document on my work computer. It is long gone and now difficult to find on the web. If I do find it I will link it here.

          Addendum: the most notorious stolen federal election in American history was the election of LBJ to the US Senate in 1948. You should read about it. A legal note: His opponent [Coke Stevenson] had enough evidence of enough fraudulent votes in one precinct to over turn the election but he went to federal court with it rather than file an original proceding in the Texas Supremes. There was evidence of fraud on both sides, and the Texas Supremes might have refused to overturn the election on the principle that in an equity case one must come to court with clean hands. Which is why Coke Stevenson tried his hand in federal court, I think. He won at trial, but lost in the 5th Circuit and the SCOTUS. 5th Circuit said it ultimately had no jurisdiction, and SCOTUS agreed.

          In Texas, LBJ was mockingly known as Landslide Lyndon until he became Majority Leader. Then he was our Lyndon.

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        • Mark:

          I do think that displays an unprecedented level of cynicism.

          Three words should put this claim to rest…Russia Collusion Hoax.

          There really are no historical parallels to this attack on elections without evidence.

          Of course there is evidence. You won’t find it in the WaPo or NYT, but it exists.

          BTW, the Texas case wasn’t really about fraud. It was about unconstitutional changes to election law, or failure to enforce election law, which appears to have indeed happened.

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        • You won’t find it in the WaPo or NYT, but it exists.

          There is no admissible evidence in a newspaper. There has been no evidence of any significant impropriety that has been offered or introduced into a court proceeding. There are really no precedents for this level of election attack. It does not matter what Texas’ case was about because it was filed against another state. The Texas R Party did sue to attack the R governor’s extension of early voting, btw, on similar state constitutional grounds.

          In July, Abbott added six days to the early voting period, moving the start date up to Oct. 13 from Oct. 19, citing the coronavirus pandemic. In the lawsuit, filed Wednesday with the state Supreme Court, Abbott’s intraparty critics say the move defied election law that requires early voting to start on the 17th day before the election.

          It is the latest legal challenge to Abbott’s emergency powers, which he has wielded aggressively in dealing with the pandemic.

          “Governor Abbott seems to have forgotten that the Texas Constitution is not a document that he consults at his convenience,” Jared Woodfill, a lawyer for the plaintiffs, said in a statement. “It is an uninterrupted charter of governmental structure that limits the Governor Abbott’s ability to act as a king.”

          Jared’s dad was a friend of mine in college. A scholarship bassketball benchwarmer, he alwasy wanted me, a walk on, to guard him in scrimmage. But I digress.

          The Texas Supremes, all Rs, said Abbott’s opponents waited too long — more than 10 weeks — to challenge an order that was issued July 27.

          Look, there are proper procedures for attacking state election laws and they require timely attacks before the election. This is the only way a court can function appropriately. Fraud and errors can be complained of only after the voting. But attempts to either expand or limit voting [and there have been many of the latter] must be attacked well before the vote begins.

          Finally, there is no comparison, IMHO, of crass political attacks on individuals and partisans, all the way back to Martin Van Buren’s scandal sheet, with crass political attacks on the electoral process, itself. YMMV, and apparently it does.

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        • Mark

          There is no admissible evidence in a newspaper.

          ?? Newspapers report on evidence in criminal and civil cases all the time.

          There has been no evidence of any significant impropriety that has been offered or introduced into a court proceeding.

          There is a difference between having no evidence that MarkinAustin or ScottC finds compelling, reliable, or dispositive, and presenting no evidence at all. There have been at the very least eye-witness testimony to all kinds of impropriety. And I don’t know if it was presented in any court case, but there is a video that seems to show 4 poll workers in Georgia counting ballots for two hours after everyone else, including official observers from each party, were removed from the room. That is a significant impropriety. Again, “No evidence that convinces me” is not the same as “no evidence at all”.

          Finally, there is no comparison, IMHO, of crass political attacks on individuals and partisans, all the way back to Martin Van Buren’s scandal sheet, with crass political attacks on the electoral process, itself.

          This is a semantic deceit that introduces a false frame. An attack on the “electoral process itself” would be, for example, when someone condemns our electoral system as undemocratic, calls for the abolishment of the Electoral College, and demands a wholly different method of electing the president – you know, like what Hillary and the D’s did after 2016. That is an attack on the electoral process itself. Legal cases claiming (whether convincingly or not) that election laws duly put into place by state legislatures were either ignored, violated, or unconstitutionally changed actually depend upon, and in so doing reinforce, the legitimacy of the electoral process. You can call these cases unconvincing, absurd, and cynical, but you cannot sensibly call them “attacks on the electoral process itself”.

          Beyond that, I just find it to be the height of irony to see people who took a 4 year (and counting?) joy ride on the Russian Collusion Hoax train in an attempt to undermine Trump’s legitimacy and destroy his presidency now breaking out the fainting couches over claims that Trump was cheated out of this election.

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        • Probably because they want to be re-elected in their districts.

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        • As a reminder:

          Like Taibbi, I happen to think both election results weren’t fraudulent, but what’s going on with Trump supporters now is a mirror image of Clinton supporters in 2016. #Resistance and all that.

          There’s a link in the comments on the Tweet to the YouTube video of celebrities like Martin Sheen calling for the Electoral College to vote against Trump in 2016.

          Now, I do believe it’s different when the President himself is the one driving the conspiracy theories, but that’s simply one of degree.

          Also worth noting as Taibbi does, none of the social media platforms sanctioned anyone for spreading conspiracy theories about Russia and 2016 or calling for the electoral college to overturn the results.

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        • HRC drove the moronic Russia Collusion Hoax so in your view they are mirrors.

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        • It will be a grand experiment. The only crimes remaining will be ignore mask mandates, dining indoors, or criticizing elected politicians!

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        • I mean, I’ll do Thunderdome. Kinda been a dream of mine.

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        • I’m feeling the healing, the hands reaching out…

          https://www.breitbart.com/2020-election/2020/12/13/photos-joe-bidens-dogs-play-tug-war-trump-toy-he-calls-unity/

          To wrap around our throats.

          Every knee will bend.

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        • Oops.

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        • I expect there was typical and new fraud and irregularities that probable aren’t enough to flip the election. But that sense depends more on non-evidentiary data points (the small number of counties Biden won, the absurdly small number of those in attendance in his rallies, his loss of so many historical bellwether states, etc, etc) … none of which is how elections are decided, but I also find the press’s disinterest in a presidential victory with so many never-before achievements kind of damning.

          But I don’t see a huge difference in what the Democrats did in 2016 and what the Republicans are doing now. Just more litigation in the courts rather than the press.

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        • KW:

          Just more litigation in the courts rather than the press.

          The press and the nation’s intelligence organizations.

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        • I tend to agree with Douthat that HRC was a follower not an instigator in 2016. 2020 was different.

          Also useful reminder about the House Democrats who tried to protest the election certification.

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        • jnc:

          I tend to agree with Douthat that HRC was a follower not an instigator in 2016.

          An excerpt from the book “Shattered”, an inside account of the 2016 Clinton campaign (emphasis added):

          In other calls with advisers and political surrogates in the days after the election, Hillary declined to take responsibility for her own loss. ‘She’s not being particularly self-reflective,’ said one longtime ally who was on calls with her shortly after the election. Instead, Hillary kept pointing her finger at Comey and Russia. ‘She wants to make sure all these narratives get spun the right way,’ this person said.

          That strategy had been set within twenty-four hours of her concession speech. Mook and Podesta assembled her communications team at the Brooklyn headquarters to engineer the case that the election wasn’t entirely on the up-and-up. For a couple of hours, with Shake Shack containers littering the room, they went over the script they would pitch to the press and the public. Already, Russian hacking was the centerpiece of the argument.

          Trump is certainly a unique politician in many ways, and perhaps even uniquely bad in certain ways, but propagating the notion among his supporters that he lost because of election skullduggery is definitely not one of them.

          Like

        • Also, I think the Trump case is a lot stronger (if ultimately doomed and a responsible politician might have conceded by this point and maybe refocused on an election integrity project or something). But I don’t believe Hillary conceded and lots of Democrats never conceded, almost none of them blamed the loss on the candidate or campaign, plenty didn’t show up for the inauguration, the Obama admin attempted to sabotage Trump by stealth rather than being openly hostile, and “not my president” was a Democrat catchphrase.

          Assuming every loss is a stolen election might be the new normal.

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        • When was the last time the Democrats have felt that a POTUS of theirs was fair and square? I honestly cannot think of any since Eisenhower.

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        • “But I don’t believe Hillary conceded and lots of Democrats never conceded”

          She did, and then made excuses after the fact for the loss that absolved her and her campaign.

          “Last night, I congratulated Donald Trump and offered to work with him on behalf of our country. I hope that he will be a successful president for all Americans. This is not the outcome we wanted or we worked so hard for and I’m sorry that we did not win this election for the values we share and the vision we hold for our country.”

          https://www.cnn.com/2016/11/09/politics/hillary-clinton-concession-speech/index.html

          The biggest example of a Democrat refusing to concede that I can think of is Stacey Abrams in the Georgia gubernatorial election in 2018.

          And of course Democrats try to spin as to why that’s somehow different than what Trump is doing:

          https://thehill.com/homenews/state-watch/530003-stacey-abrams-rejects-comparison-between-her-refusal-to-concede-and

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        • jnc:

          The biggest example of a Democrat refusing to concede that I can think of is Stacey Abrams in the Georgia gubernatorial election in 2018.

          That’s a good one. But of course everything is unprecedented and uniquely bad when Trump does it, don’t you know?

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        • Al Gore in 2000–at least until Dec 13th. Trump obviously going to roll past that date.

          As I recall it took until June 30th the next year before the Franken/Coleman election was settled.

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        • I thought so, too! Funny because it’s true and not . . . over-doing it, which so much lefty political “humor” does.

          That being said, some of the comments below it “THIS HAS BEEN THE LONGEST 38 DAYS OF MY LIFE!” and “I CAN’T WAIT”. Same orientation that made every day awful as long as the Bad Orange Man was president. I was mostly fine during the Obama presidency and only thought of him when I felt an itch to read some political news. When it got boring, I stopped. I don’t see hinging your happiness on who occupies a political office at a particular time.

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        • KW:

          Funny because it’s true and not . . . over-doing it, which so much lefty political “humor” does.

          Very much agree.

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        • “I’m feeling the healing, the hands reaching out…”

          Touching Me, Touching You!

          Sweet Caroline
          Good times never seemed so good
          [So Good, So Good]

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  2. So strange that a corrupt Trump toady would have kept this a secret, don’t you think?

    https://dailycaller.com/2020/12/11/william-barr-hunter-biden-investigation/

    I will never understand anyone who respects Comey as a stand up guy but then trashes Barr. Wholly inexplicable, outside of TDS.

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    • I thought that was Russian Disinformation. My TV told me so.

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    • TDS and just hard, hard partisanship. Team membership tells opposing tribe members all they need to know. If it was Comey or Mueller or Brennan working for Trump in that capacity, and that person did anything that looked favorable towards Trump, then they’d hate on that person just as much. It’s not about consistency or actions as much as it is group membership. He’s on the wrong side. All they need to know.

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  3. This is pretty much spot on the mark.

    These politicians are playing with fire. Desperate people are going to react at some point. And they are making people desperate.

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  4. Clearly based on evidence and science:

    “Asked why he chose midnight to 5.a.m for a curfew, Northam said it was “common sense.”

    “I’ll also say something that my parents taught me when I was younger, and that is nothing good happens after midnight,” Northam said at a news conference. ”

    https://apnews.com/article/pandemics-virginia-coronavirus-pandemic-adf28761b5bfee9d9c85c2ce701ebda1

    Like

  5. As Cuomo destroys the livelihoods of and impoverishes thousands of people with his dictatorial lockdown policies, he throws himself a thousands-of-dollar-a-seat birthday fundraiser loaded up with a bunch of Hollywood celebrities.

    https://www.weaselzippers.us/460708-kids-cant-go-to-school-people-cant-go-to-work-lives-are-ruined-but-andrew-cuomo-will-gets-to-celebrate-his-birthday-with-celebrities-and-raise-money/

    My first reaction is that, like progressives more generally, these people simply have zero self-awareness. But at this point I don’t think that can explain it. I think that they view themselves in the same above-the-unwashed-masses way that royalty in days of old viewed themselves. They feel entitled and just don’t give a shit.

    Fuck Trump? No, Deniro, fuck you and your entire coterie of clueless, self-important morons.

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    • I think this is correct. I don’t think it’s new l, precisely, but once you give a class ownership of the press and constant insulation from serious criticism and feedback … they feel there is no limitation on them just doing as they please.

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  6. Good read:

    “Insofar as Kendi’s book speaks for modern antiracism, then it should be praised for clarifying what the “anti” really means. Fundamentally, the modern antiracist movement is not against discrimination. It is against inequity, which in many cases makes it pro-discrimination.”

    https://www.city-journal.org/how-to-be-an-antiracist

    Like

  7. #believeallwomen

    #(unlessithurtsaDemocrat)

    Like

    • You tell me Trump did something like this, I believe it. Because it’s so believable.

      You tell me Cuomo did it I believe it because it’s so believable. You tell me Brett Kavanaugh was participating in gang-rapes that’s harder to believe.

      As with anything, I’d want actual evidence. But it’s believable.

      And in all cases folks come out and demand to know why they didn’t say something earlier. In all cases—-paychecks and careers are compelling, even if they shouldn’t be. And when MeToo comes along it’s all the past and you don’t want to dig it up …. until it weighs on you and eventually you decide you should say something.

      I also don’t think it hurts that Cuomo comes off as a terrible governor. If we was the next JFK this lady wouldn’t have said boo, most likely.

      Like

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