AFL-CIO And Dems Push For A New Tax

Is anyone actually surprised by this? It seems that the only thing the Dems know is tax, tax and tax again. They have not had an original idea since Franklin Delano Roosevelt's disastrous New Deal policies that caused the Great Depression to last longer than it should have.

Raising taxes never helped an economy. No nation has ever taxed itself into prosperity although many have taxed themselves into poverty.

Here is the new tax the Dems want to impose on America:

The AFL-CIO, one of the Democratic Party’s most powerful allies, would like to assess a small tax — about a tenth of a percent — on every stock transaction.

Nevermind that your money is already double and triple taxed. This simply adds another tax that reduces the amount of money you have to spend on your family. Somewhere along the line, the Democrats got the idea that the working American is a limitless ATM from which the government can withdraw money anytime it wants. But those of us living out here in reality know the truth. Every dollar the government takes is one less dollar the taxpayer has to buy food and clothing for their children or to put towards their own retirement.

What will the ultimate effect of this be?

The AFL-CIO and some allied Democrats would like to cut down on the overall level of trading, or at least give the U.S. government a piece of the action, which would likely tamp down trading.

That's it. Reduce the activity in the marketplace and then take money for people earned it and then give that money to someone who did not earn it.

Typical leftists.

You can access the complete article on-line here:

AFL-CIO, Dems Push New Wall Street Tax
Alexander Bolton
The Hill
August 30, 2009

Socialist Obama Administration Makes New Power Grab To Seize Private Sector Businesses

I know there are still several libs out there who stamp their feet and whine like little children that Obama is not a socialist. Well, you can put your faux temper tantrums back into the closet for another day. All doubt about Obama's intentions of sending the United States into a socialist disaster similar to that of European nations has been erased.

The White House announced a plan for the government to come in and seize control of private sector businesses. At first, the excuse was that the government should come in and give oversight to any bank or firm that recieved TARP money. Now, they just want to go in and take over any bank, firm or business they feel like.

From the Washington Post:

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers. The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy. The government also would assume the authority to seize such firms if they totter toward failure.

There are two major problems with this. First, our government is so incompetant that it is extremely doubtful that they would ever be able to accurately identify a firm that was tottering "towards failure." After all, Sarbanes-Oxley was designed to do just that and it failed to give us notice every single time another Wall Street firm went bankrupt. Apart from that, if the market dictates that is business should fail then the business should fail.

Second, this is nothing more than a socialist power grab, an attempt at seizing the means of wealth and production. Sound like a part of a plan introduced by a radical who lived back in the 1800's and wrote the Communist Manifesto? It should. It is precisely that.

Obama has also mentioned that he wants to put limits on executive compensation in all businesses, whether they recieved TARP money or not.

The Obama Administration has now removed all disguise from their policies. They are most definitely socialists and they are no longer timid about exposing it. Socialism is a disaster and had failed everywhere it has been tried. Certainly, Obama is aware of history.

But I believe that Obama has a more sinister purpose in mind here. He wants his socialist allies in Congress to grant his administration these broad powers to act against the American private sector in order to tighten the devastating stranglehold that socialism will ultimately have on us and our lives.

Is this what Chris Buckley, David Brooks and Doug Kmiec had in mind when they convinced all those people to vote for Obama?

This madness must be stopped.

Wake up America!

You can access the complete article on-line here:

U.S. Seeks Expanded Power To Seize Firms
Binyamin Appelbaum and David Cho
Washington Post
March 24, 2009

Democrats Propose New Tax On Stock Trades (H.R. 1068)

The Democrats (with the exception of the tax-cutting John F. Kennedy) have the same solution to every problem that comes up: taxes, taxes and more taxes which means that they have not had an original idea since Franklin Delano Roosevelt. Pretty soon, they are going to have a tax for everything.

For example, the Commonwealth of Massachusetts is actully considering an idea which taxes motorists based on how many miles they drive on roads and highways.

In that style, eight Congressional Democrats have introduced a bill (HR 1068) that will tax transfers of stocks and other securities on the market. They claim it is a vehicle by which Wall Street will pay the taxpayer back for the $700 billion bailout monies, but a look at the bill itself will show otherwise:

SEC. 4475. TAX ON SECURITIES TRANSACTIONS. `(a) Imposition of Tax- There is hereby imposed a tax on each covered securities transaction an amount equal to the applicable percentage of the value of the security involved in such transaction. `(b) By Whom Paid- The tax imposed by this section shall be paid by the trading facility on which the transaction occurs. `(c) Applicable Percentage- For purposes of this section-- `(1) IN GENERAL- The term `applicable percentage' means the lesser of-- `(A) the specified percentage, or `(B) 0.25 percent.

Did you notice the "By Whom" sub-section? These socialist Dems actually think that the trading facility is going to pay those costs out of pocket! The truth is, the trading facility will simply pass that cost on to the stock-holder in the form of higher trading fees.

When will these libs get a clue about economic reality?

Here is another example of the fantasyland that the Democrats live in. The stated objective of this bill is to "pay back" the taxpayer. But what is written in the bill, again, shows something completely different:

(8) All revenue generated by this transfer tax should be deposited in the general fund of the Treasury of the United States, scaled to meet the net cost of these bailouts, and phase out when the cost of the bailouts are repaid.

First of all, sending this money into the "general fund of the Treasury of the Untied States" means that it could get spent on anything that the government wants, and thus, does not have to be spent "paying back" the taxpayer. Knowing the Democrats, their intention was never for any such thing.

Second, the "phase out" is laughable since the Dems will never allow any tax to expire nor will they ever vote to repeal one. Plus, if they keep using this money for something other than the stated intention of this bill (i.e. to "pay back" the taxpayer) they can claim that the goal's of this new tax have not been reached and therefore will be able to spin a reason as to why the tax must remain in place.

Further, the true culprit of the Wall Street financial crisis is the 1977 Community Re-investment Act. Before anything can be done to restore Wall Street, the CRA must be repealed.

This is nothing more than another socialist bill which the Dems want to use as a mechanism for Barack Obama's stated objective of redistributing wealth. It must die before it serves to wreak even more havoc on our economy.

The eight Democrats are: Mr. Defazio, Mr. Welch, Ms. Sutton, Mr. Capuano, Mr. Wu, Mr. Stark, Ms. Delauro, and Ms. Edwards.

You can access the bill on-line here:

Let Wall Street Pay For Wall Street's Bailout Act Of 2009
Library Of Congress
February 13, 2009

House Approves Automaker Bailout, Sends Measure To Senate. Time To Tell The Senate "No!"

Well, the House has approved the ill-fated bailout of Detroit, mostly along party lines. It is clear that the Dems are serious about paying back the big unions for their support in the election and that they want the American taxpayer to foot the bill for it.

The only good thing I can say about this is that my own Representative, Frank Wolf (R-VA) actually voted against this bill. Maybe because of the letters he recieved from people like me or maybe because he has looked back at the dismal failure of the Wall Street bailout and thought better of doing the same thing again.

Now, we have to stop the measure from passing in the Senate. According to Bloomberg:

The House approved a $14 billion loan package intended to prevent a collapse of domestic automakers that would threaten millions of U.S. jobs. The 237-170 vote sends the measure to the Senate, where opposition is growing. ... Some Republicans said the measure would waste taxpayer money without saving the companies from collapse. The bailout “won’t save a single job,” said Representative David Dreier, a California Republican. ... In the Senate, Republicans said the bill lacked the 60 votes needed to overcome delaying tactics threatened by some members. Democrats have a 50-49 edge in the Senate.

It's time to get going and write your Senators. Ask them to vote "Nay" on the automaker bailout. It is destined to fail as surely as the Wall Street bailout failed.

Besides, given that Congress has been running massive deficits and cannot balance a budget, can we really trust them to prevent the Big Three from going into bankruptcy? I am not the smartest man in the world, but even I know better than that.

You can access Congressional email directories on-line here:

Congressional Email Directory

Just click on your state and you will be taken a page with contact links for your Congressional delegation.

Here is a sample of what you can email to your Senator. Feel free to copy and paste it:

Dear Senator, I am writing this email to ask you to vote "Nay" on the automaker bailout bill which recently passed the House of Representatives (H.R. 7321). This bill is destined to be a dismal failure just as the $700 billion Wall Street bailout was a failure and huge waste of taxpayers money. It is already bad enough that our children and grandchildren are going to have to pay for these bailout failures. We need to stop this foolishness now before we begin saddling a debt on our great-grandchildren as well. The best thing to do for Detroit is to let them go into Chapter 11. That way, they can reorganize and retool. This will allow them to modernize as the foreign carmakers have done and Detroit can become competitive again. Right now, the Big Three have manpower costs such that they must pay over $70 an hour to build a car whereas other automakers can do the same job for $35 to $45 an hour. Bailing out Detroit will only prolong the inevitable and waste billions of taxpayer dollars in the process. As a final note, you should realize that hundreds of thousands of small businesses across the United States are in danger of failing, but no one is proposing to bail any of them out. Please apply that same standard to Detroit. Thank you.

You can access the complete article on-line here:

House Approves Automaker Bailout, Sends It To Senate
John Hughes
Bloomberg.com
December 10, 2008

Congress Finally Acknowledges Some Of The True Culprits Of The Credit Crisis

Former Fannie Mae and Freddie Mac executives were scheduled to be questioned about their roles in the sub-prime credit crash. Names like Leland Brendsel, Daniel Mudd and Franklin Raines as well as Richard Syron are being mentioned.

These are the people who should have been hauled before Congress back in September-October when the House and Senate were discussing the failed bailout of Wall Street. Maybe now we can get some real answers to the problem and Congress will see that the 1977 Community Reinvestment Act needs to be repealed if we really want to clean up the entire mess.

From CNN:

“The companies made irresponsible investments, costing taxpayers hundreds of billions of dollars,” said Rep. Henry Waxman, D-Calif., committee chairman. “Their own risk managers warned time after time of the dangers of investing in subprime market, but those risks were ignored.” The companies have drawn criticism from lawmakers on both sides of the aisle for taking on too much risk, exacerbating the credit crisis when the housing market declined. Sen. John McCain, R-Ariz., during his recent failed presidential bid, said Fannie and Freddie were the “catalyst - the match that started this forest fire.” The publicly traded but federally backed companies together control or guarantee about $5 trillion in mortgage loans. They purchase large amounts of home loans, bundle them together and divide them into securities that can be sold to investors.

I'm gald to see that people like Franklin Raines (who made over $90 million in personal income off of these high risk, sub-prime loans) are finally being brought before the cameras so that the American people can see who profited by this whole thing and why.

You can access the original blog entry on-line here:

Fannie, Freddie Ignored Warning Signs
David Goldman
CNNMoney.com
December 9, 2008

Democrats Will Not Talk About Freddie Mac Or Fannie Mae In Their Sham Hearings

HAT TIP TO HOT AIR!

Man! Did we predict this or what? In an earlier post, I speculated that Pelosi and Company would not be bringing people like Chris Dodd, Barney Frank and Franklin Raines before Congress to answer questions about their roles in the Freddie and Fannie meltdown. I was right. She won't.

In fact, the Dems will only being before Congress the Wall Street CEOs, despite the fact that these CEOs did everything they could to obey the law under the 1977 Community Reinvestment Act and it was trying to stay within that law that led to the current sistuation we are in. Will the Dems acknowledge this? No! They are trying to deflect the blame elsewhere.

From Ed Morrissey over at Hot Air:

Democrats have begun a search for the culprit in the financial collapse in a manner somewhat akin to the OJ Simpson search for Nicole Brown and Ron Goldman’s murderer. The Hill reports that Henry Waxman’s Oversight Committee hearing grilled Lehman Brothers executives over CEO pay and “deregulation”, but never mentioned the names Fannie Mae and Freddie Mac. Republicans found that more than a little strange.

Here is what The Hill is reporting:

Democrats aimed their harshest attacks at deregulation and CEO pay, using former Lehman Chairman and Chief Executive Officer Richard Fuld as an example during a recess hearing of the House Oversight and Government Reform Committee. Chairman Henry Waxman (D-Calif.) also released internal documents showing Lehman’s compensation committee recommended $20 million in “special payments” to three departing executives on Sept. 11, four days before the firm filed for bankruptcy. Republicans, for their part, launched a campaign to pin the financial meltdown on Fannie Mae and Freddie Mac, and attacked Waxman for not holding a hearing to dig into the now-nationalized mortgage giants. “Any hearing on oversight that does not begin with Fannie and Freddie and [former Fannie Mae CEO] Franklin Raines will be a sham,” said Rep. John Mica (R-Fla.). “This is like investigating a train robbery and only talking to the dining car stewards.”

And check out this video of Chris Shays ripping into Congress for its own part in the Freddie/Fannie mess:

Video From C-SPAN Here

you can access the orginal Hot Air entry on-line here:

Democrats Refuse To Talk About Fannie, Freddie In Oversight Hearing
Ed Morissey
Hot Air
October 7, 2008

Pelosi Declares Hearings On Housing Crisis: Barney Frank To Co-Chair

Immediately after the Wall Street Bailout bill passed the House and went to the Oval Office for Presidential signature, Speaker Nancy Pelosi announced that there would be hearings on the subject.

According to CNN:

She said Congress will shine a new "light of scrutiny and accountability" on the nation's financial system to try to prevent a replay of the problems that plunged the nation into a financial crisis. Reps. Barney Frank, D-Massachusetts, and Henry Waxman, D-California, plan to hold hearings to increase scrutiny of the financial system, Pelosi added. "We want to take our country in a new direction for the middle class," Pelosi said. Frank told reporters Friday that starting in January, Congress will "have a major role." "We have to rewrite housing in America. ... It would be highly irresponsible if we were to stop here," he said. "Now we have to perform more serious reform."

Yet, she mentions nothing about the accountability of people like Sen. Chris Dodd, or Franklin Raines or Jamie Gorelick, the latter two having made millions off of Fannie while the organization itself was sliding into government conservatorship.

And what about Barney Frank Co-Chairing these hearings? Will anyone get him to answer questions about the way he blocked reform of Freddie and Fannie over the past several years? Will Pelosi demand accountability and transparency from him? No. She is nothing more than a partisan hack who just managed to cram through the biggest socialist package in American history.

Something else that should be looked into: Barney Frank's relationship with a former Fannie executive named Herb Moses.

From Fox News:

Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s. So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions. Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie. Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical. "It’s absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane? "If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because he’s gay. It’s the quintessential double standard." A top GOP House aide agreed. "C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?" the aide told FOX News. "No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws." Frank’s office did not immediately respond to requests for comment.

Of course they didn't immediately respond. They need time to think up a way of spinning out of it.

You can access these articles on-line here:

Pelosi: After Bill Passage, Hearings Set To Begin
CNN.com
October 3, 2008

Lawmaker Accused Of Fannie Mae Conflict Of Interest
Bill Sammon
Fox News
October 3, 2008

Congress Passes Legislation That Hands American Taxpayers The Largest Bill In History

All the scaremongers said that it was necessary to avert a credit crisis.

Credit crisis?

Where? I was still getting credit card offers through the mail. A 20-year-old friend of mine just got approved for a car loan. Student loans are still being approved. Small businesses are still able to get loans. Exactly where is the "credit crisis?"

Only on Wall Street. And Congress has now authorized the President to screw the American Taxpayer with over $805 billion in responsibilities. Maybe our children will be able to pay this off, but those of us living on Main Street just got served notice that the Federal Government cares more about the people who make big campaign donations than they do about the American people.

From the Associated Press:

The final vote, 263-171 in the House, a comfortable margin that was 58 more votes than it garnered on Monday. The vote capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act. Bush was poised to make a statement on the historic vote. "We all know that we are in the midst of a financial crisis," House Republican Leader John Boehner of Ohio, said shortly before casting his vote for government intervention in private capital markets that was unthinkable only a month ago. "And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen."

And this bailout is going to put us in a situation like none of us have ever seen!

Here is what I see:

- Wall Street Big Wigs and the Congressional recipients of their donations are stuffing my tax dollars into their pockets.
- Numerous recipients of earmarks and pork stuffing my tax dollars in their pockets.
- My gasoline prices going up because some idiot inserted a carbon tax into the bill my and stupid fool Senators (Webb and Warner) and Representative (Wolf) completely missed it!

Here is what I don't see:

- Accountability from those who caused this mess.
- I don't see Chris Dodd (D-CT) or Barney Frank (D-MA) being hauled before a Congressional committee to give account of how they blocked Republicans from enacting the reform that could averted this whole mess and saved us $805 billion dollars.
- I don't see Franklin Raines being hauled before a Congressional committee to explain how he made $90 million while Fannie was losing money.
- I don't see that the progenitor of this whole thing, the 1977 Community Reinvestment Act, has been repealed which means that banks and lending institutions are still being forced to make bad loans.

Let's see who the big winners really were:

Sec. 101. Extension of alternative minimum tax relief for nonrefundable personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption amount.
Sec. 103. Increase of AMT refundable credit amount for individuals with longterm unused credits for prior year minimum tax liability, etc.
Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Deduction for certain expenses of elementary and secondary school teachers.
Sec. 204. Additional standard deduction for real property taxes for nonitemizers.
Sec. 205. Tax-free distributions from individual retirement plans for charitable purposes.
Sec. 206. Treatment of certain dividends of regulated investment companies.
Sec. 207. Stock in RIC for purposes of determining estates of nonresidents not citizens.
Sec. 208. Qualified investment entities.
Sec. 301. Extension and modification of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign corporations.
Sec. 305. Extension of 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements; 15-year straight-line cost recovery for certain improvements to retail space.
Sec. 306. Modification of tax treatment of certain payments to controlling exempt organizations.
Sec. 307. Basis adjustment to stock of S corporations making charitable contributions of property.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 310. Extension of mine rescue team training credit.
Sec. 311. Extension of election to expense advanced mine safety equipment.
Sec. 312. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
Sec. 313. Qualified zone academy bonds.
Sec. 314. Indian employment credit.
Sec. 315. Accelerated depreciation for business property on Indian reservations.
Sec. 316. Railroad track maintenance. Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
Sec. 318. Expensing of environmental remediation costs.
Sec. 319. Extension of work opportunity tax credit for Hurricane Katrina employees.
Sec. 320. Extension of increased rehabilitation credit for structures in the Gulf Opportunity Zone.
Sec. 321. Enhanced deduction for qualified computer contributions.
Sec. 322. Tax incentives for investment in the District of Columbia.
Sec. 323. Enhanced charitable deductions for contributions of food inventory.
Sec. 324. Extension of enhanced charitable deduction for contributions of book inventory.
Sec. 325. Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds.
Sec. 401. Permanent authority for undercover operations. v Sec. 402. Permanent authority for disclosure of information relating to terrorist activities.
Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax credit.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children.
Sec. 504. Income averaging for amounts received in connection with the Exxon Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as 5-year property.
Sec. 506. Modification of penalty on understatement of taxpayer's liability by tax return preparer.
Sec. 512. Mental health parity.
Sec. 601. Secure rural schools and community self-determination program.
Sec. 602. Transfer to abandoned mine reclamation fund.
Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern severe storms, tornados, and flooding.
Sec. 703. Reporting requirements relating to disaster relief contributions.
Sec. 704. Temporary tax-exempt bond financing and low-income housing tax relief for areas damaged by Hurricane Ike.
Sec. 706. Losses attributable to federally declared disasters.
Sec. 707. Expensing of Qualified Disaster Expenses.
Sec. 708. Net operating losses attributable to federally declared disasters.
Sec. 709. Waiver of certain mortgage revenue bond requirements following federally declared disasters.
Sec. 710. Special depreciation allowance for qualified disaster property.
Sec. 711. Increased expensing for qualified disaster assistance property.
Sec. 712. Coordination with Heartland disaster relief.
Sec. 801. Nonqualified deferred compensation from certain tax indifferent parties.

And don't forget Sec. 117. The carbon tax. Now the Feds can royally screw our economy just like the governments in Europe are screwing theirs!

At least I can say one thing that is a bit of a relief. This bailout is going to ultimately fail and the economy is going to crash (we cannot keep the markets artificially inflated like this) and it looks like Barack Obama is going to win this election. The crash will happen on his watch and he will have no one to blame except himself and the Democrat-controlled Congress.

You can access the complete article on-line here:

Congress OKs Historic Bailout Bill
Julie Hirschfeld and David Espo
Associated Press via Breitbart
October 3, 2008

Now There Is A 'Carbon Tax' In The Bailout!

As if taking your money and giving it to Wall Street wasn't enough! Now they want to reach deeper into your wallet and take even more money from you! All for a manufactured crisis called "Climate Change" that the legitimate sceintific world has shown to be a natural phenomenon.

Check this out from Matthew Vadum at Capital Research Center:

If you look at page 180 of the 451-page monster bailout bill that easily passed the Senate yesterday (PDF here), you will see that it includes at Section 116 language about the tax treatment of “industrial source carbon dioxide.” It also provides, at Section 117, for a “carbon audit of the tax code.” What could a provision about the tax treatment of “industrial source carbon dioxide” and another provision about doing a “carbon audit” of the tax code possibly have to do with restoring confidence in Wall Street’s troubled credit markets? The answer: NOTHING. This appears to be an attempt by global warming fanatics to lay the foundation for an economy-killing carbon tax just like the “cap-and-tax” system that is now destroying European industry. If you think the Mother of All Bailouts is bad, just wait till you see the carbon tax. Get ready to reduce your standard of living drastically.

And the amount of money you have to take care of your family.

This bailout is getting worse and worse.

You can access the complete article on-line here:

Hidden Carbon Tax Provisions In Paulson’s Bailout 2.0
Matthew Vadum
Capital Research Center
October 2, 2008

An Interesting Thought About The Wall Street Bailout Bill: Do Any In Congress Have A Financial Interest?

I'm sure there are websites out there that have this information. Somewhere, there has to be records of whether or not Representatives or Senators own stock or otherwise have any kind of financial interest in the Wall Street institutions that are being bailed out under this bill.

I would be very interested in seeing those records and comparing them to the voting record of the entire Congress, particularly for those who vote "Yes."

If any member of Congress did have any financial interest in any institution that is about to recieve Federal monies, that would be a major conflict-of-interest and said member of Congress should have recused him/herself from voting.

If there are such connections, I wonder if the entire bill can be invalidated or declared unconstitutional?

It would certainly be an interesting exercise to see who has investments in these places.

An Open Letter To Rep. Frank Wolf Concerning The Wall Street Bailout

Frank Wolf
241 Cannon Building
Washington, DC 20515

Subj: Emergency Economic Stabilization Act

Mr. Wolf,

As you already know, Senators Warner and Webb have voted “Yes” to bailing out the Wall Street Banks and Institutions that got themselves into a serious mess by engaging in extremely poor business practices. This bailout amounts to the Federal Government using my hard earned money to give a huge payday to a group of Wall Street executives while completely failing to hold accountable any of the people who caused this whole situation to begin with.

Further, this bill is being shoved down our collective throats since there have been no hearings, no debates and no investigations into the exact cause of the problem.

I recommend that at least four people be brought before Congress and put under oath to explain their exact roles in this matter. These four are Rep. Barney Frank (D-MA), Sen. Chris Dodd (D-CT), Franklin Raines, who made $90 million in personal income off of Fannie and Jim Johnson who made over $20 million. I, for one, would like to know how these last two made money while everyone else lost money.

Beyond all of this is the pork that has been tacked onto this bailout. Main Street is going to bail out Wall Street for some Puerto Rican Rum and maybe some NASCAR tracks? How about that “Wool Research?” God knows we can never have too much of that now, can we? And what about those “Wooden Arrows designed for use by children?” Maybe we can line the Wall Street CEOs up against the wall and shoot them with the arrows!

This $700 billion legislation just went up to $850 billion, and now the House is talking about tacking even more pork onto this!

It doesn’t matter whether this bill is 3 pages or 3000 pages. It is still a socialist bailout that will saddle me and my children with bills that will take decades to pay off, if we can even pay them off at all.

Perhaps you should take the time to read through the entire bill before voting to require the American Taxpayer to handle more debt than we can afford.

Also, you should know that the contributions made to you in gratitude for your “Yes” vote on the original bill have not gone unnoticed. To wit:

Securities brokers & investment companies: $28,150
Finance, Insurance & Real Estate: $27,250
Commercial banks & bank holding companies: $21,700
Credit Unions: $13,250
Investment banking: $11,800
Credit agencies & finance companies: $11,250
Private Equity & Investment Firms: $7,800
Venture capital: $7,500
Banks & lending institutions: $6,000
Stock exchanges: $1,950
Savings banks & Savings and loans: $400
Commodity brokers/dealers: $250

The total you received from entities who support this bailout is $137,300. That is how much you have effectively been paid to hand me and my children this huge debt of at least $850 billion plus whatever other pork you and your peers decide to put into this thing. The latest estimate I saw was a final bill of $905 billion.

There is a reason these banks and lending institutions are failing. It is because the market is dictating that the fail. Once they do, businesses that engage in wiser practices will step up and take their place.

Please do the right thing and vote “No” on this bailout bill, or if you cannot do that, please explain to me why I have to provide a huge payday to Wall Street while those who got us into this mess get to walk away with no accountability and at the same time, are shoving my money into their pockets.

Thank you.

Phone Numbers For Senators Webb And Warner

If you are a Virginian, please call these two men and tell them to vote "No" on the Wall Street Bailout!

Warner: (202) 224-2023
Webb: 202-224-4024

Senate To Vote On New Wall Street Bailout Bill, Link To Text In This Post. We Need To Stop This Thing!

First of all, let's get something straight. This is a bailout of Wall Street to be paid for by Main Street. Barack Obama has already gone on record with his ridiculous remark that tax cuts are the reason for this whole mess. Tax cuts had nothing to do with this. This whole thing was the creation of some liberal Democrats who forced banks and lenders into making high risk loans and now those risks are threatening the liquidity of the banks.

Read this excerpt from Michael Flynn over at Reason:

Let's be clear: This is a Wall Street crisis, not a national economic crisis. The overall economy, while a bit weak, is still growing. Some politicians are comparing the current environment to the Great Depression. But in 1932, when the federal government last moved to bail out the banking sector, economic output had fallen 45 percent and unemployment was a staggering 24 percent. Today, economic output is actually up and unemployment is a historically modest 6.1 percent. The overall economy doesn't even face a liquidity crisis in the current turmoil. Consumer, commercial/industrial, and real estate loans are all up over last year. Main Street is doing fine. The liquidity crisis is confined to Wall Street, between and among investment banks, insurance and securities firms, and hedge funds. There is the possibility that the contagion could spread, but in a global capital market, this is hardly certain. It is the intersection of several underlying trends that have brought us to this point, not a breakdown in any specific part of the financial sector. The fundamental flaw with the bailout approach is that it ignores these trends and simply seeks to shore up the finances of certain Wall Street institutions.

The Roots Of The Crisis
Michael Flynn
Reason.com
October 1, 2008

And yet, Barack Obama, the man is is supposedly so intelligent about things, blames it all on tax cuts.

Let's look at what is being proposed as a solution to this Wall Street problem. The Senate Conservative Fund website has posted the current bill that the Senate will be voting on this evening for all to see. It went from 3 pages to 451 pages, just like that!

Ed Morrisey over at Hot Air gives us a small look at some of the earmarks he found in this legislation:

New earmarks in Bailout bill - Film and Television Productions (Sec. 502) - Wooden Arrows designed for use by children (Sec. 503) - 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504) “Extenders” in the bailout bill. - Virgin Island and Puerto Rican Rum (Section 308) - American Samoa (Sec. 309) - Mine Rescue Teams (Sec. 310) - Mine Safety Equipment (Sec. 311) - Domestic Production Activities in Puerto Rico (Sec. 312) - Indian Tribes (Sec. 314, 315) - Railroads (Sec. 316) - Auto Racing Tracks (317) - District of Columbia (Sec. 322) - Wool Research (Sec. 325)

Let's see, Main Street is going to bail out Wall Street for some Puerto Rican Rum and maybe some NASCAR tracks? How about that "Wool Research?" God knows we can never have too much of that now, can we? And what about those "Wooden Arrows designed for use by children?" Maybe we can line the Wall Street CEOs up against the wall and shoot them with the arrows!

I don't care what crap they added to this bill. It could be 3000 pages or its original 3 pages, it doesn't matter. It is a socialist bailout of banks and institutions that should be allowed to go under so that new, more principled business interests can step up and take over.

We need to stop this thing again, just like we did last Monday, especially the current version going before the Senate.

Contact your Senators at the following link:

Congressional Email Directory
WebSlingerz.com

In the left-hand column, find your State and click on it. It will take you to a page with links to the home pages of your entire Congressional Delegation including your Senators. Call them. Send them emails. Tell them to vote "No" on this taxpayer money squandering bailout.

You can access the Hot Air posting on-line here:

Senate Bailout Bill Hits The Internet
Ed Morrisey
Hot Air
October 1, 2008

Divest From The Failures And America's New Credo: Qua Mei? (Where's Mine?)

It's going to happen. Wall Street is going to get bailed out at a cost of $700 billion to the taxpayer. It makes me sick to think that Congress, with their ultra-low approval rating, is going to saddle more bills on us and that those bills are going to be passed along to our children and grandchildren.

Well, we voted for change in 2006 when the Democrats took over and now we are really getting that change. It just isn't the change that the Dems promised us.

On the way into work today, I heard a caller on a morning talk show suggest something that we should all look into. He offered that we should all pull whatever money we have out of the banks being bailed out and invest it instead in a bank or institution that operates on more sensible business practices. That sounds like a very good idea. We need a list of all the banks that will be partaking of this bailout so that we'll know which ones to pull our money out of.

You may ask: "Why pull your money out if they are getting bailed out?" Because they will get right back into the same trouble as they will continue to operate under the same bad business principles that got them here in the first place. Remember the Chryler bailout back in the early 80's? I do.

Here are some that I know of:

• American International Group (AIG)


• Goldman Sachs Group Inc.


• Merrill Lynch & Co.


• Deutsche Bank AG


• Morgan Stanley

We, as a people, should not in the least bit tolerate having these institutions around if they are simply going to suck money out of us every ten or fifteen years. Since the government won't get rid of them, we need to do something.

I have already called my investment broker and asked him to look into which of my investments are held by the above institutions. When he finds them, he will pull me out of them and reinvest the money more sensible institutions.

I recommend that you all do the same.

Now that I've gotten that off my chest, let me share with you some more reasons why we should divest from these failing lenders.

D.F. Krause from North Star Writer's Group has penned an open letter to Congress in which he asks "Where's mine?" Along the way, he notes some of the more ludicrous bailouts that are taking place with Congressional support.

From his column:

I also see that Congress wants to loan $25 billion to the Big Three automakers. Gosh, why don’t they just borrow the money from banks? Oh. Right. I forgot. Their credit ratings are garbage and no bank in its right mind would loan them money – especially when they’re so busy doing all these subprime mortgage deals! I guess banks aren’t very smart, but even they know better than to loan money to GM, Ford and Chrysler.

The only time I ever hear the words "bank" and "smart" in the same sentence is when the banks are being criticized, and rightly so.

Remember when you bailed out Chrysler 30 years ago? Now they want money again. What a surprise! And how did they talk you into that one? By promising that at least this time they won’t bring Lee Iacocca with them?

That line may have been written sarcastically, but it is absolutely true. Bailing out businesses that practice bad habits will lead to more bailouts in the future. Those businesses should have been allowed to fail.

Wall Street invested billions in bad mortgages. GM, Ford and Chrysler wasted billions and made crappy cars no one wants.

Where does it all end? Right at the foot of the American taxpayer.

You can access the complete column on-line here:

Qua Mei? America’s New Credo: ‘Where’s Mine?’
D.F. Krause
North Star Writer's Group
September 29, 2008

The Wall Street Bailout: Congress Agrees To Screw The American Taxpayer

Well, they're going to do it. Despite the fact that the vast majority of America is against it, Congress and President Bush have reached an agreement that will bailout the floundering S&L's which got themselves into their own mess and are now holding their hands out to the American taxpayer for relief.

In short, this bailout means that while the taxpayer is getting screwed, the ones who caused this problem will be getting kissed.

Even the members of Congress don't fully understand all the provisions of this legislation. There are so many things that can go wrong with it that no one in their right mind would ever vote for it. Robert J. Samuelson over at NewsWeek made some intitial observations:

Under Paulson's proposal, the Treasury could buy distressed mortgage-backed securities. Consider a batch of hypothetical securities originally worth $100 million and paying an interest rate of 6 percent. They're no longer worth $100 million because half of the homeowners have stopped making their monthly payments. Suppose, then, that the government buys the mortgages for $50 million. It earns 6 percent on its $50 million, and if it borrowed money at 4 percent to buy the securities, it would make a tidy profit. If the government holds the securities until maturity and all the remaining homeowners repay their mortgages, the government would come out ahead.

Read that last sentence very carefully. "If the government holds the securities until maturity and all the remaining homeowners repay their mortgages ..."

How many of you reading this blog believe that all of those homeowners will repay their mortgages? How many of you believe that even half of those homeowners will repay their mortgages? For those homeowners who fail to repay, who do you think is going to pay?

If you said, "The American taxpayer," then you are absolutely correct.

Here are a few more variables that no one in their right mind would predict for the better:

First, we don't know what price the government would pay for the mortgage-backed securities. There are conflicting goals. On the one hand, the government wants to minimize the bailout's costs to taxpayers; that would favor paying the lowest possible price. In my example, the profit would be greater if the government paid only $40 million. On the other hand, the whole idea of the bailout is to help banks and other financial institutions get rid of risky assets and replace them with cash that would encourage a resumption of normal lending and investing. That favors a higher price. If the government paid $80 million instead of $40 million, say, it would lose money. Second, we don't know how a weakening economy will affect future mortgage repayments. The worse the economy gets, the more homeowners will default. At the end of June, about 2.75 percent of home mortgages were in foreclosure, and an additional 6.4 percent were at least 30 days behind in their payments. The unemployment rate was 6.1 percent in August. If it rose to 7 percent or higher, defaults and delinquencies would climb. In my example, if only 25 percent of borrowers repaid their mortgages, the government would lose money.

In short, it is a good bet that this latest attempt at government intervention is going to blow up in our faces somewhere down the road and once again, the American taxpayer is going to be forced into paying that bill too.

This bailout is a bad idea. It needs to be killed pronto.

You can access the complete column on-line here:

What Is It Really Going to Cost?
Robert J. Samuelson
NewsWeek
September 25, 2008

Barney Frank: Lies And Damned Lies About Freddie And Fannie

So, what does a left-wing socialist do when confronted with a financial crisis caused by the government? He incorrectly blames it on the private sector.

That is precisely what Rep. Barney Frank (D-MA) did when he blamed the current Wall Street crisis on the free market. Here is exactly what he said:

"The private sector got us into this mess… The government has to get us out of it. We do want to do it carefully."

Now, there is no spinning this nor is there any taking it out of context. Rep. Frank was clear and unambiguous in what he said.

But, he is making false accusations. In fact, he is either deliberately lying or he has the worst memery in the history of the House of Representatives.

On September 9, 2008, the Wall Street Journal published an excellent article which details Frank's history of comment and action on the Freddie Mac and Fannie Mae meltdowns. Here is the history:

In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie's oversight. Mr. Frank dismissed the idea, saying concerns about the two were "overblown" and that there was "no federal liability there whatsoever."

Apparently, Frank doesn't seem to think that they are "overblown" now.

Two years later, Mr. Frank was at it again. "I do not regard Fannie Mae and Freddie Mac as problems," he said in response to another reform push. And then: "I regard them as great assets." Great or not, we'll give Mr. Frank this: Their assets are now Uncle Sam's assets, even if those come along with $5.4 trillion in debt and other liabilities. Again in June 2003, the favorite of the Beltway press corps assured the public that "there is no federal guarantee" of Fan and Fred obligations. A month later, Freddie Mac's multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. "I do not think we are facing any kind of a crisis," he said at the time.

I don't believe that anyone even remotely familiar with the situation as it exists today would deny that this was "any kind of crisis."

More:

Three months later he repeated the claim that Fannie and Freddie posed no "threat to the Treasury." Even suggesting that heresy, he added, could become "a self-fulfilling prophecy." In April 2004, Fannie announced a multibillion-dollar financial "misstatement" of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that "I think Wall Street will get over it" if the two collapsed.

Good! Then we don't need this bailout nor do we need any Federal oversight, now do we?

Frank wasn't done yet. Read on:

By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. "What blocked it [reform] last year," Mr. Frank said then, "was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don't think there should be a Fannie Mae or a Freddie Mac." What really blocked it was Mr. Frank's insistence that any reform be watered down and not include any reduction in their MBS holdings. In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, "I can ask Fannie Mae and Freddie Mac to show forbearance" in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding. And this is exactly what Mr. Frank attempted to prove when the housing market started to go south. He encouraged the companies to guarantee more "affordable" mortgages, thus abetting their disastrous plunge into subprime and Alt-A loans. He also pushed for, and got, an increase in the conforming-loan limits to allow Fan and Fred to securitize and guarantee larger mortgages. And he pressured regulators to ease up on their capital requirements -- which now means taxpayers will have to make up that capital shortfall. But the biggest payoff for Mr. Frank is the "affordable housing" trust fund he managed to push through as one political price for the recent Fannie reform bill. This fund siphons off a portion of Fannie and Freddie profits -- as much as $500 million a year each -- to a fund that politicians can then disburse to their favorite special interests.

Ahh! Now we are getting to the real truth here. As long as special interests were getting a good share of the profits, all the mismanagement by Rep. Frank & Co. was okay. But once that mismanagement culminated in a financial crisis, it was all the fault of the "private sector," or so Barney Frank claims.

They always say to give credit where credit is due. Well, Barney Frank certainly deserves his share of the credit for helping to bring about the current financial crisis.

You can access the complete article on-line here:

Fannie Mae's Patron Saint
The Wall Street Journal Op-Ed
September 9, 2008

My Take On The Proposed Bailout And A Look At Some Gaffes

The big topic of conversation this week is about the lending houses on Wall Street. There is a bailout plan in Congress right now that has a minimum price tag of $700 billion and an estimated price tag of $3 trillion. I know there are pros and cons to each side, but I am coming out against the bailout.

Why?

Because I am one of those Americans who works hard, ensures that I stay gainfully employed, pays all of my bills on time and doesn't live beyond my means. But, because I am one of those hard workers, I am also in the group who will have to pay for this bailout.

On the other side, we have people who do not work so hard, don't live within their means and we also have lending houses making very bad business decisions and when those decisions came back to haunt them, they ran crying to the Federal government and asked then to saddle people like me with the bill.

I don't want to pay. I mean, hey, if it is okay for others not to pay their mortgages or take on more debt than they can pay back, why should anyone expect me to be the responsible one? If others can shirk their responsibilities, I can too. Correct?

Of course that is correct. That is why I am against this bailout. I, and the millions like me, should not be punished for someone else's mistakes.

Further, this bailout fails to correct the government mechanism that allowed this crisis to occur: The Community Reinvestment Act Of 1977. This law forced banks into making bad loans. The Clinton Administration expanded on it in the 90's to force banks to take on even higher risks. That law is still on the books and as long as it is there, it will create more problems down the road.

Now those risks have blown up in our faces. It is time to let the lending industry fail so that it can be rebuilt in a more rational manner.

Saddling me, my children and my grandchildren with more debt is not the answer. Holding the people responsible for this accountable is the right answer.

Call Congress and tell them not to approve this bailout.

---

So, Joe Biden made another gaffe. He says that back in 1929, when the markets collapsed and the depression began, President Roosevelt didn't just sit there. No, he got on television and began pitching his plan to fix it.

There is just two problems with this. Roosevelt wasn't President in 1929 and television was not a staple of mass communications yet.

One has to wonder, with all the gaffes that Biden (and Obama) have pulled, where do the Democrats come off with all of their criticisms of Sarah Palin?

Let's look at some of these gaffes.

For Biden:

- Biden invites a wheelchair bound State Senator to "stand up and take a bow."

- Biden contradicts Obama on clean coal.

And what of Obama?

- 57 states.

- Forgetting that he was in Kansas City rather than St. Louis.

- Saying John McCain would be Geroge Bush's "4th term."

- Telling a seven-year-old little girl that America was a "mean country."

- Having to be reminded that he was a Christian rather than a Muslim.

Before the Dems start any more false rumors about Sarah Palin, they might want to have a sit-down with the two guys on their own ticket. Right now, the biggest advantage the Republicans have is the Democrat ticket.