Broker Check

July 31, 2015


Richard Dreyfuss Tries Role as Civics Educator

            Actor Richard Dreyfuss was recently in New York City to film his role as Bernard Madoff in a television mini series. The actor has an interesting sideline. The 67 year old libertarian says American public schools are woefully lacking in civics education. On time off from the set, he visited local school boards and state education officials to advocate for more classroom attention to explaining how U.S. democracy works and the responsibilities of citizenship.


            He was interviewed and said “I have children and I saw them growing up without any instruction in the values of the Enlightenment and I became terrified.”


            The actor created a nonpartisan non profit called the Dreyfuss Civics Initiative in 2008 and said he hopes to promote it more energetically this year. He is not lobbying for a specific curriculum but wants teachers in the fourth through twelfth grades to focus more on America’s political structure and the need for civil debate. Wall Street Journal 7/11/15 p. A15.


            And I thought I was the only one who thought this way!


Saudis up Pressure on Iran


            This month, the Sunni Saudis increased their oil production to a historic high of 10.6 million barrels of oil a day in order to increase the pressure on an Iranian economy already staggering under economic sanctions from the U.S. and Europe in an attempt to prevent the Shiite Iranians from getting a nuclear weapon.


            This action by the Saudis, which has resulted in a collapse of oil prices, may not prove successful. A final option open to the Saudis will be to get nuclear weapons as soon as possible. So while the nuclear agreement is being cheered in Tehran, while Obama aides are fist pumping in the White House, while Europeans are salivating at the prospect of doing business in Iran, and while the Israelis are trying to lobby the U.S. Congress against the deal, the Saudis survey a black future and no good options to change it. Wall Street Journal 7/17/15 p. A11.


            There are, however, hints that the Saudis and Israelis have started to talk about working together against the common Iranian enemy because both countries have lost faith in the U.S.


Where are the Banks?


            A rare coalition of mortgage lenders and left-leaning consumer advocates are calling on the Obama administration to ease up on lawsuits, they say, are driving banks away from making loans to borrowers with weak credit histories.


            In 2013, of the top 10 FHA lenders, 4 were banks. In the first quarter of 2015 of the top 10 FHA lenders, only 1 was a bank.

            The groups behind the new proposal say the problem is that under current Dodd Frank rules, FHA lenders must promise that everything in the loan paperwork is accurate. If there are mistakes even minor ones, the lenders can be liable for up to three times the damages. Wall Street Journal 7/16/15 p. A3.


                As a result, the banks are choosing not to give mortgages and to give loans to only the most credit worthy borrowers and in our opinion thereby stunting the economy.


The IRS Says It Can Discriminate For 270 Days


            It isn’t every day that judges on the D.C. Circuit Court of Appeals declare themselves “shocked.” But that happened one day in May when an animated 3 judge panel eviscerated the Obama IRS and Obama Justice Department during oral argument in a case alleging the agency delayed the tax-exempt application of a pro-Israel group due to its policy views.


            In December 2009, Pennsylvania based Z Street applied for 501(c)(3) status to pursue its pro-Israel educational mission. Eight months later in July 2010 when the group called to check on what was taking so long, an IRS agent said that auditors had been instructed to give special attention to groups connected with Israel, and that they had sent some those applications to a special IRS unit for additional review.


            Z Street sued the IRS for viewpoint discrimination, and in May 2014, (4 years later) a federal district judge rejected the IRS motion to dismiss. The IRS appealed and Justice said Z Street’s case should be dismissed because the Anti-Injunction Act bars litigation about the assessment or collection of tax. The three judges were incredulous. They said, “they are not in court seeking to restrain the assessment or collection of a tax, they are in court seeking a constitutionally fair process.”


            Justice then argued the suit should be foreclosed, since under IRC 7428(b)(2) groups may sue to obtain their tax-exempt status if no action has been taken for 270 days, and that should be an alternative to Z Street’s approach.


            Judge Garland said, “You don’t really mean that, right? Because the next couple words would be the IRS is free to discriminate on the basis of viewpoint, religion, race (for 270 days). You don’t actually think that?” Imagine the IRS announces today a policy that say as follows: “No application by a Jewish group or an African American group will be considered until one day short of the period under the statute….. Is it your view that that cannot be challenged?” 


            The Department of Justice lawyer was sent out of the court with the admonishment “If I were you, I would go back and ask your superiors whether they want us to represent that the government’s position in this case is that the government is free to unconstitutionally discriminate against its citizens for 270 days. Wall Street Journal 5/7/15.


             As always, if you have any questions about these or any other matters, do not hesitate to call us.


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