The Bailout Bill

Now that Senator Shelby (R-AL) has decided that Sen. Chris Dodd (D-CT) has gone as far as President Obama will let him go in negotiating the "financial reform" bill he has ended the talks. He released the following statement:

“I thank Leader McConnell and my Republican colleagues for providing an opportunity for my negotiations with Chairman Dodd to run their course. I believe we owed the American people our best effort to make whatever changes we could to this incredibly complex piece of legislation because it will have wide ranging implications for our economy. Chairman Dodd has assured me that he will address a number of concerns I have expressed with respect to ending bailouts. We have been unable, however, to make any meaningful progress on other important components of the legislation. It is now my belief that further negotiations will not produce additional results.

“This bill still contains a sprawling new consumer protection bureau that will find and force its way into facets of our economy that had nothing to do with the housing crisis. This massive new bureaucracy would have unchecked authority to regulate whatever it wants, whenever it wants, however it wants. I am aware of no other arm of the federal government this powerful, yet so unaccountable. In my negotiations with Chairman Dodd, I have consistently supported strengthening consumer protections. I have also advocated for a sensible and meaningful role for safety and soundness regulators in this new agency’s operations. Unfortunately, despite my demonstrated willingness to propose compromise solutions, this sensible step has proved to be a bridge too far.”

You might want to know what all the haggling was about. According to the Heritage Foundation the bill would:

Creates a protected class of too big to fail firms. Section 113 of the bill establishes a "Financial Stability Oversight Council," charged with identifying firms that would "pose a threat to the financial security of the United States" if they encounter "material financial distress." While these firms would be subject to enhanced regulation, such a designation would also signal to the marketplace that these firms are too important to be allowed to fail and, perversely, allow them to take on undue risk.

Creates permanent bailout authority. Section 204 of the bill authorizes the Federal Deposit Insurance Corporation (FDIC) to "make available … funds for the orderly liquidation of [a] covered financial institution." Although no funds could be provided to compensate a firm's shareholders, the firm's other creditors would be eligible for a cash bailout. The situation is much like the bailout AIG in 2008, in which the largest beneficiaries were not stockholders but rather other creditors, such as Deutsche Bank and Goldman Sachs.

Provides for seizure of private property without meaningful judicial review. The bill, in Section 203(b), authorizes the Secretary of the Treasury to order the seizure of any financial firm that he finds is "in danger of default" and whose failure would have "serious adverse effects on financial stability." This determination would be virtually irreversible in court.

Establishes a $50 billion fund to pay for bailouts. Funding for bailouts is to come from a $50 billion "Orderly Resolution Fund" created within the U.S. Treasury in Section 210(n)(1), funded by taxes on financial firms. However, according to the Congressional Budget Office, the ultimate cost of bank taxes will fall on the customers, employees and investors of each firm.

Opens a "line of credit" to the Treasury for additional government funding. Under Section 210(n)(9), the FDIC is effectively granted a line of credit to the Treasury Department that is secured by the value of failing firms in its control, providing another taxpayer financial support.

Authorizes regulators to guarantee the debt of solvent banks. Bailout authority is not limited to debt of failing institutions. Under Section 1155, the FDIC is authorized to guarantee the debt of "solvent depository institutions" if regulators declare that a liquidity crisis ("event") exists.

Imposes one-size-fits-all reform in derivative markets. Derivatives are already increasingly being traded on clearinghouses thanks to private efforts coordinated by the New York Fed. But the Senate bill would require virtually all derivative contracts to be settled through a clearinghouse rather than directly between the parties. Applying such ill-designed blanket regulation would make financial derivatives more costly, more difficult to customize, and, consequently, less widely used—which would increase overall risk in the economy.

Evidently Chairman Dodd was unwilling to compromise on the "consumer protection" aka economy wide regulating agency. What the FDA is doing in trying to limit the amount of salt an American can consume in a day and the EPA deciding it has the power to regulate the amount of CO2 produced in America. Now we will have an agency that regulates all our financial transactions and limits our decisions. If this bill passes the Democrats will have the trifecta, they'll be able to control what we eat, that our job is green and how we spend our money, after we pay our taxes of course.

President Bailout

Pres. "Bailout Barry" Obama has reportedly insisted that Sen. Dodd stop negotiating with Senate Republicans on the "financial reform" bill. You see, he thinks it's good politics to have Harry Reid hold a cloture vote a day and label Republicans as tools of the Wall St. fatcats. This is a highly cynical strategy considering that the list of major donors to his election campaign looks like a rogues gallery of the architects of the great recession.

Fannie Mae/Freddie Mac: $126,349

Goldman Sachs: $994,795

Citigroup: $701,290

JP Morgan Chase: $695,132

Morgan Stanley: $514,881

Even though Goldman Sachs has been charged by the SEC with civil fraud, President Obama has yet to return a penny of their donations. These companies made out like bandits thanks to the American taxpayer through TARP. All we have received in return is a nearly worthless AIG and stakes, along with the UAW in GM and Chrysler.

There is a reason that Goldman and the other big banks support Dodd/Franks, it's because it decreases competition while promising nearly unlimited access to the federal treasury if their future bets go sour like those on the sub-prime mortgage market. The House bill caps taxpayer exposure at $4 trillion, the Senate bill doesn't have a cap, which means unlimited exposure. How is this supposed to prevent the big banks from engaging in risky behavior? This bill is TARP on steroids, HGH and what else you got? Instead it will mean that banks like USAA that serves our military and their family members' will need to curtail the services they provide.

Senate Republicans should hold the line until they get major concessions that will actually benefit average Americans and not the politically connected big banks on Wall St.

Mr. President, Return Goldman's Dirty Dough

The Senate is about to bring the execs of Goldman Sachs in for a dressing down for reportedly making $3.7 billion by shorting the mortgage market. Today's hearing will see the usual bloviating from Senators and incriminating e-mails like:

"According to Sparks, that business is totally dead, and the poor little subprime borrowers will not last so long!!!" Tourre wrote in a March 7, 2007, email to his girlfriend.

and

"Just made it to the country of your favorite clients!!! I'm managed (sic) to sell a few abacus bonds to widow and orphans that I ran into at the airport, apparently these Belgians adore synthetic abs cdo2," Tourre wrote in June 2007

The one missing ingredient from the typical Capitol Hill theatre is a call to return campaign donations from the pariah company/individual du jour. With Enron politicians couldn't get rid of the donations fast enough. Same with Abramoff. With the SEC indicted Goldman, not so much. Considering that Goldman was at the center of the collapse of the sub-prime mortgage market that led to the great recession you have to wonder about the double standard.

President Obama received $994,795 from employees of Goldman in 2007 and 2008 at the same time the company was betting that the mortgage market would collapse, taking the American economy with it. He hasn't returned a penny of this blood money. Since his campaign committee, Obama for America simply morphed into Organizing for America, the president has a vehicle to return the cash. If O for A can't cover that amount, the money should come from the coffers of the DNC, since Mr. Obama is the titular head of the Democratic party.

I think $994,795 would make a nice start for a scholarship fund for the children of the miners who died in West Virginia, whose funeral he not only attended, but addressed.

Another MA Boondoggle

Now that the Ted Williams tunnel,Lenny Zakim bridge and all the other projects that are collectively known as "The Big Dig" are for the most part done draining the public coffers(The wallets of commuters are another story) MA politicians are scrambling to find a new way to fleece the taxpayers. Enter the Edward M. Kennedy Institute for the United States Senate. Sen. Kerry and Rep. Markey are earmarkers in chief for this project.

The amount of taxpayer money being funneled to a Dorchester shrine to the late Sen. Edward M. Kennedy has ballooned to $38 million and could rise to at least $68 million this year, infuriating watchdog groups who insist the project should be privately funded.

Williams and other critics called it “ridiculous” and an “egregious waste” that supporters want to siphon $28.9 million of the funding from the Defense Department budget alone. Nearly $19 million of that is already signed into law.

Our nation is fighting two wars and these clowns think it's a swell idea to take money designated for our national defense to build a shrine to our late senator? I suppose this means that President Obama's "overseas contingency operations" have reached our shores. Who knew that Dorchester was such a hotbed of Islamic Jihadists? Drugs, gangs, home invasions; sure, but radical fundamentalist islamists, not so much. Senator Kerry and Rep. Markey should be ashamed of themselves for taking money away from our men and women in uniform and using it to construct a building that doesn't add one iota to our national defense.

Building an edifice of glorification at a time of historic budget deficits is a terrible idea and doubly so when the funds used are being stripped from the defense budget. Presidential libraries don't receive a penny from the federal treasury and the Kennedy Institute should live by the same rules. From the national archives website:

A Presidential library is constructed with private or non-Federal funds donated to non-profit organizations established usually for the express purpose of building a Presidential library and supporting its programs.

The papers and records created by, for, or about a President during his life and career comprise the holdings of all Presidential libraries.

Here's what they have in mind to honor the late senator.

The institute will house Kennedy’s papers and memorabilia from more than four decades in the Senate. It will include a museum, reception area, library and classrooms, according to its Web site. It will host mock Senate sessions and programs for high school and college students and incoming senators and their staffs.

Sounds a lot like the function of a presidential library huh?

Considering that Ted Kennedy, "The Liberal Lion of the Senate" is an icon of the left the advocates of this project should have no problem funding it entirely with private contributions. One fundraising e-mail from moveon.org should do the trick. Heck, bigtime Democratic party donors like George Soros or John Paulson whose hedge fund made a cool couple of billion dollars colluding with Goldman Sachs could fund the entire project themselves. I wonder if this news nugget helps explain why this project is being funded via earmarks?

The Democratic National Committee says it will spend more than $50 million in cash and other resources on the November elections, as the party struggles to limit expected losses in congressional races and possibly gubernatorial contests too.

The planned expenditure, worked out by top White House and congressional Democrats, would mark a significant investment in a non-presidential election.

Is it possible that the taxpayers are being forced to fund this project to keep the coffers of the DNC full? Maybe the Dems are afraid that their deep pocketed idealogical soulmates can't afford to pay for a proper tribute/memorial/palace/learning center to Teddy and try to save the hides of politicians who ignored the will of the American people by voting for the federal takeover of health care at the same time.

From the only in Massachusetts files:

Kerry requested an additional $10 million late last week, his spokeswoman, Brigid O’Rourke, said in an e-mail Friday afternoon

Added Ellis: “Will this be a long-term commitment? Every year, will we be giving $10 million?”

Manifesto For Freedom

During the past several months, hundreds of thousands of Americans have debated thousands of ideas to solve our nation’s most pressing problems. 454,331 votes were cast. It has been an open process and has provided a genuine opportunity to give voice to a broad cross section of concerned Americans.

Those on the left that are attempting to smear the Tea Party Movement as being motivated by racism should note that the color of the president's skin or his birth certificate aren't even on the radar. Neither is violence. This is a blueprint for limiting the scope of the federal government by electing like minded individuals to office. The only reason why these principles are even remotely revolutionary is that our Constitution has been corrupted beyond recognition by progressives in the legislature and their accomplices in the judiciary. It bears repeating, that this revolution is going to be fought in the voting booths across this nation in November and Tea Partiers are peaceful, patriotic Americans that are deeply concerned for our country's future. All one need do is attend a Tea Party to see that the lies being spread by the Democratic party and their allies in the media are simply that, lies. Read for yourself what we're all about:

The Contract from America
We, the undersigned, call upon those seeking to represent us in public office to sign the Contract from America and by doing so commit to support each of its agenda items, work to bring each agenda item to a vote during the first year, and pledge to advocate on behalf of individual liberty, limited government, and economic freedom.

Individual Liberty
Our moral, political, and economic liberties are inherent, not granted by our government. It is essential to the practice of these liberties that we be free from restriction over our peaceful political expression and free from excessive control over our economic choices.

Limited Government
The purpose of our government is to exercise only those limited powers that have been relinquished to it by the people, chief among these being the protection of our liberties by administering justice and ensuring our safety from threats arising inside or outside our country’s sovereign borders. When our government ventures beyond these functions and attempts to increase its power over the marketplace and the economic decisions of individuals, our liberties are diminished and the probability of corruption, internal strife, economic depression, and poverty increases.

Economic Freedom
The most powerful, proven instrument of material and social progress is the free market. The market economy, driven by the accumulated expressions of individual economic choices, is the only economic system that preserves and enhances individual liberty. Any other economic system, regardless of its intended pragmatic benefits, undermines our fundamental rights as free people.

1. Protect the Constitution
Require each bill to identify the specific provision of the Constitution that gives Congress the power to do what the bill does. (82.03%)

2. Reject Cap & Trade
Stop costly new regulations that would increase unemployment, raise consumer prices, and weaken the nation’s global competitiveness with virtually no impact on global temperatures. (72.20%)

3. Demand a Balanced Budget
Begin the Constitutional amendment process to require a balanced budget with a two-thirds majority needed for any tax hike. (69.69%)

4. Enact Fundamental Tax Reform
Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words—the length of the original Constitution. (64.90%)

5. Restore Fiscal Responsibility & Constitutionally Limited Government in Washington
Create a Blue Ribbon taskforce that engages in a complete audit of federal agencies and programs, assessing their Constitutionality, and identifying duplication, waste, ineffectiveness, and agencies and programs better left for the states or local authorities, or ripe for wholesale reform or elimination due to our efforts to restore limited government consistent with the US Constitution’s meaning. (63.37%)

6. End Runaway Government Spending
Impose a statutory cap limiting the annual growth in total federal spending to the sum of the inflation rate plus the percentage of population growth. (56.57%)

7. Defund, Repeal, & Replace Government-run Health Care
Defund, repeal and replace the recently passed government-run health care with a system that actually makes health care and insurance more affordable by enabling a competitive, open, and transparent free-market health care and health insurance system that isn’t restricted by state boundaries. (56.39%)

8. Pass an ‘All-of-the-Above” Energy Policy
Authorize the exploration of proven energy reserves to reduce our dependence on foreign energy sources from unstable countries and reduce regulatory barriers to all other forms of energy creation, lowering prices and creating competition and jobs. (55.51%)

9. Stop the Pork
Place a moratorium on all earmarks until the budget is balanced, and then require a 2/3 majority to pass any earmark. (55.47%)

10. Stop the Tax Hikes
Permanently repeal all tax hikes, including those to the income, capital gains, and death taxes, currently scheduled to begin in 2011. (53.38%)

If you agree with these principles please go to http://www.thecontract.org and add your name to the growing list of patriots.

Pres. Obama's Governing Philosophy

Many have speculated that President Obama followed the Saul Alinsky playbook(Rules for Radicals) on his road to the presidency and is indeed still employing the same tactics to push his agenda through Congress against the will of the American people. Others are convinced that he is simply enacting the policies that George McGovern wanted so badly for this nation, but was unable to realize due to his 49 state landslide loss in 1972. Still others are convinced that his 20 year affiliation with the anti-American Rev. Jeremiah Wright means that he hates this country and is doing everything in his power to ensure its downfall. While these theories have some merit, I maintain he's a doctrinaire progressive who adopted the lyrics of a sitcom theme song as his political mantra.

For starters, it's the only way I can explain his selection of Joe Biden as his running mate. Vice President Biden makes the ideal Laverne to the president's Shirley. Try not to think of Speaker Pelosi when you see Squiggy or Senate Majority Leader Harry Reid when Lenny speaks. I have to admit that the president's "Big Ragu" stumps me a bit. Is it Andy Stern, or George Soros? Maybe it's Rahm? I believe I read somewhere that he studied ballet before he found his true calling in naked shower shouting matches.

This administration and its allies in Congress have been all about breaking rules and making progressive dreams come true since January 2009:

The government takeover of GM and Chrysler saw what Michael Barone classified as "gangster government" when the until then legally binding contracts of bondholders were cast aside and the UAW was handed large shares of the companies they helped bankrupt in the first place.

When the election of Senator Scott Brown(R-MA) threatened the federal takeover of healthcare they used the tactic of "Reconciliation" to avoid the until then institutionally sacred filibuster and pass legislation that affects every American.

The Dems even contemplated using the Slaughter Solution to simply deem the takeover of health care without actually voting for it. Thankfully, that insult to democracy proved to be a bridge too far, even for Nancy Pelosi.

In an attempt to demonize opponents of their policies, they accused their fellow citizens of using the toxic N-word. When belatedly asked for evidence to back up their claims they suddenly want to move on for the good of the country.Since Rep. Jesse Jackson Jr. (D-IL) wasn't able to get anyone on tape shouting a racist word or holding a racist sign they have decided to infiltrate the Tea Party movement to manufacture "racism" for their minions on the left to use smearing the American people who believe that government is out of control and this president and this Congress need to be reined in.

What has a Democratic president and democratic majorities in both houses of Congress meant for the average American? Try:

* Washington will spend $31,406 per household in 2010 - the highest level in
American history (adjusted for inflation). It will collect $18,276 per
household in taxes. The remaining $13,130 represents this year's staggering
budget deficit per household, which, along with all prior government debt,
will be dumped in the laps of our children.

* Government spending has increased by $5,000 per household since 2008, and
nearly $10,000 per household over the past decade.

Yet there is no free lunch: If spending is not reined in, then eventually
taxes must also rise by $10,000 per household.

Both CBO head Elmendorf and Fed Chairman Bernanke say the trillion dollar plus deficits in perpetuity that President Obama with a Democratic Congress are wracking up are "unsustainable".

I hope the American people remember that word, "unsustainable" in November.

Romneycare

Governor Patrick has gone to war with the health insurance industry in Massachusetts and wonder of wonders they are fighting back. I guess he figured that since the insurance industry didn't fight President Obama's federal takeover, they would take baby Obama's campaign posturing lying down as well. The difference is that Obamacare promises the health care insurers a few boom years before the bust, in MA we're officially at bust time.

Want a preview of ObamaCare in action? Check out the Massachusetts insurance market—which earlier this week entered a state of "market chaos" after Governor Deval Patrick denied a host of health insurance rate increases.

More from the Wall Street Journal:

This week it became impossible in Massachusetts for small businesses and individuals to buy health-care coverage after Governor Deval Patrick imposed price controls on premiums. Read on, because under ObamaCare this kind of political showdown will soon be coming to an insurance market near you.

The Massachusetts small-group market that serves about 800,000 residents shut down after Mr. Patrick kicked off his re-election campaign by presumptively rejecting about 90% of the premium increases the state's insurers had asked regulators to approve. Health costs have run off the rails since former GOP Governor Mitt Romney and Beacon Hill passed universal coverage in 2006, and Mr. Patrick now claims price controls are the sensible response to this ostensibly industry greed.

Yet all of the major Massachusetts insurers are nonprofits. Three of largest four — Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health — posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies. So until the matter is resolved, the insurers have simply stopped selling new policies.

How do companies, even non-profits, manage to lose money when the citizens of MA are mandated to buy their product? Simple:

The Boston Globe reports, “Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.”

Predictably, costs in Massachusetts — always high — have only gone higher; the state now spends about 30 percent more per capita on health care than the rest of the nation. Predictably, the insurance regulations have only made insurance more expensive, as has been the case elsewhere; premiums in the individual market have been growing at a 30 percent annual rate. Predictably, the new health-care program has cost more than expected; spending grew by about 40 percent from 2006 to 2009.

It's funny how every government "entitlement program" ends up costing a lot more than the bean counters expected. First it was Social Security that needed a fix, aka a tax hike and increase in retirement age and then Medicare and Medicaid began busting holes in the federal and states' budgets. Now, it's Romneycare in MA,and ME,TN,KY and OR have all experienced budget busting experiences with socialized medicine, soon Obamacare will bring the phenomenon nationwide.

On a related note:

Dependency: The Democrats' reform bill had hardly become law before doctors and insurers began getting calls asking about free health care. The growing sense of entitlement is disheartening, to say the least.
'Where do we get the free ObamaCare, and how do I sign up for that?" That's what Carrie McLean, an agent for eHealthInsurance.com, told McClatchy newspapers she's been hearing from callers.
She said that the company's phone center has been "inundated by uninsured consumers who were hoping that the overhaul would translate into instant, affordable coverage."

Mitt Romney has the skills and smarts to be a very effective president. Unfortunately, his obstinancy in defending a deeply flawed and costly health care delivery system makes that increasingly unlikely.

Oathbreakers

Constitution, Article 6 - Debts, Supremacy, Oaths

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.

The first Congress developed this requirement into a simple, 14-word oath:

"I do solemnly swear (or affirm) that I will support the Constitution of the United States."

The current version of the oath that members of Congress must take was implemented in 1884. This post civil war version adds a duty to preserve the union:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.

By stating that "he doesn't worry about the Constitution", Rep. Hare is violating his oath of office. How many Democrats in their heart of hearts agree with the statement made my their fellow representative?

The health vote makes it pretty clear that from the president on down the Democratic party's only concern is enacting their idea of "social justice", the Constitution be damned. Then again, since Rep. Hare can't seem to tell the difference between the Constitution and the Declaration of Independence maybe it's just a matter of ignorance and a civics class will set them on the proper path. After all, John Conyers (D-MI) thinks that Congress has the power to takeover the health care system because of the "good and welfare clause" in the Constitution, which doesn't exist. Since he's the Chairperson of the House Judiciary Committee, it should give the average American citizen a fair idea of the average Congressional Democrats familiarity with our nation's founding document. Rep. Tierney's vote for the nationalization of health care shows his contempt or ignorance of the US Constitution, either way he needs to be shown the door in November by the voters of the sixth district of Massachusetts.