Archive for October 1st, 2008

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Our Constitution States: “All bills for raising Revenue shall originate in the House of Representatives.”

As a result, the Senate does not have the power to initiate bills imposing taxes. Furthermore, the House of Representatives holds that the Senate does not have the power to originate appropriation bills, or bills authorizing the expenditure of federal funds.

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This is scandalous! They are assuming you are too tired and beaten down to care. A lot of these people are up for re-election – continue to let them know what you think!

This is a conference call place BY THE TREASURY DEPARTMENT – it’s too long to post here in its entirety – so read and listen at NakedCapitalism.com.

Mussolini-Style Corporatism in Action: Treasury Conference Call on Bailout Bill to Analysts (Updated)

We certainly are glad we are NOT in Washington D.C. – the stench must be horrible!

Pelosi paid husband with PAC funds

House Speaker Nancy Pelosi has directed nearly $100,000 from her political action committee to her husband’s real estate and investment firm over the past decade, a practice of paying a spouse with political donations that she supported banning last year.

Financial Leasing Services Inc. (FLS), owned by Paul F. Pelosi, has received $99,000 in rent, utilities and accounting fees from the speaker’s “PAC to the Future” over the PAC’s nine-year history.

The payments have quadrupled since Mr. Pelosi took over as treasurer of his wife’s committee in 2007, Federal Election Commission records show. FLS is on track to take in $48,000 in payments this year alone – eight times as much as it received annually from 2000 to 2005, when the committee was run by another treasurer.

Lawmakers’ frequent use of campaign donations to pay relatives emerged as an issue in the 2006 election campaigns, when the Jack Abramoff lobbying scandal gave Democrats fodder to criticize Republicans such as former House Majority Leader Tom DeLay of Texas and Rep. John T. Doolittle of California for putting their wives on their campaign and PAC payrolls for fundraising work.

Last year, Mrs. Pelosi supported a bill that would have banned members of Congress from putting spouses on their campaign staffs. The bill – which passed the House in a voice vote but did not get out of a Senate committee – banned not only direct payments by congressional campaign committees and PACs to spouses for services including consulting and fundraising, but also “indirect compensation,” such as payments to companies that employ spouses.

“Democrats are committed to reforming the way Washington does business,” Mrs. Pelosi said in a press release at the time. “Congressman [Adam] Schiff’s bill will help us accomplish that goal by increasing transparency in election campaigns and preventing the misuse of funds.”

Last week, Mrs. Pelosi’s office said the payments to her husband’s firm were perfectly legal, insisting she is compensating her husband at fair market value for the work his firm has performed for the PAC. But ethical watchdogs said the arrangement sends the wrong message.

“It’s problematic,” said Melanie Sloan, executive director of the Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit ethics and watchdog group. “From what I understand, Mr. Pelosi doesn’t need the money, but this isn’t the issue. … As speaker of the House, it sends the wrong message. She shouldn’t be putting family members on the payroll.”

A senior adviser to Mrs. Pelosi described the payments to FLS as “business expenses.”

“She’s followed all the appropriate rules and regulations in terms of records and paperwork,” said Brendan Daly, Mrs. Pelosi’s spokesman. “When [former treasurer] Leo McCarthy became ill, she thought that it was best that that firm did the accounting and she’s paid fair market value in San Francisco.”

Between 1999 and 2006, FLS collected $500 per month to cover rent, utilities and equipment for the leadership PAC, according to the FEC records. The PAC’s address is listed as a personal mailbox in San Francisco, across the street from FLS’s Montgomery Street office building, but the rent payments went to an office space.

In early 2007, the PAC’s treasurer, Leo T. McCarthy, former Democratic speaker of the state assembly and lieutenant governor in California, died. Mr. Pelosi took over as treasurer and his company’s PAC payouts rose.

At that point, FLS started charging the PAC $24,000 per year for accounting work. In January 2008, the PAC’s rent – paid to FLS – also quadrupled from $500 to $2,000 per month.

Katie Falkenberg/The Washington Times PARTNERSHIP: Nancy Pelosi’s husband, Paul F. Pelosi, was by her side at a Democratic event in 2006.

Mr. McCarthy, the previous treasurer, had done the work as a volunteer, according to FEC documents and Jennifer Crider, a senior adviser to Mrs. Pelosi and spokeswoman for the Democratic Congressional Campaign Committee. She said FLS’ accounting fees are in line with costs for other PACs.

The jump in rent was an adjustment to reflect San Francisco’s pricey real estate market, Miss Crider said. The rent was adjusted to $1,250 per month, with $750 in back rent to reflect that the rent should have been increased in mid-2007. This was the first increase since the PAC was established in mid-1999, records show.

Over the first six months of 2008, FLS was the largest vendor for Mrs. Pelosi’s PAC. Brian Wolff, a political consultant, is the second-largest vendor, bringing in $22,500 this year.

FLS’ payments represent 11 percent of the $213,900 the PAC raised over the first half of this year, according to the FEC documents.

PACs, which are designed to help politicians contribute to other candidates and build influence with colleagues, operate under lighter restrictions than traditional campaign committees.

Meredith McGehee, policy director at the nonpartisan Campaign Legal Center, said putting family members on a PAC payroll is bound to raise questions and, in some cases, allow for abuse.

“The reality is that under the current system, PACs are rife with self-dealing transactions,” she said. “The laws and regulations could and should be strengthened.

“There is a point now that you’re starting to talk about real money,” she said of Mrs. Pelosi’s PAC. “This is not just a mom-and-pop operation and any self-dealing transaction by a member of Congress is going to get scrutiny, particularly with large amounts of money and prominent members.”

It is illegal for members of Congress to hire family members to work on their official staff, but hiring relatives to work on a campaign or PAC is legal.

To be sure, many political action committees employ or work with family businesses. Last year, CREW found that 19 members of Congress used campaign committees or PACs to purchase services from a family member between 2002 and 2006.

Mrs. Pelosi’s PACs have been in trouble before. In 2004, one of her political action committees, Team Majority, was fined $21,000 by the FEC for accepting donations over federal limits. It was one of two PACs she operated at the same time. The Team Majority PAC was closed shortly after the fine was levied.

House of Representatives’ Web site overwhelmed

WASHINGTON (CNN) — The servers hosting the Web sites of the House of Representatives and its members have been overwhelmed with millions of e-mails in the past few days, forcing administrators to implement the “digital version of a traffic cop” to handle the overload — for the first time ever.

Servers hosting Web sites of the House of Representatives have been flooded with millions of e-mails in recent days.

“This is unprecedented,” said Jeff Ventura, communications director for the House’s chief administrator.

The tidal waves of e-mails and page views began over the weekend after negotiators announced Sunday that a deal had been reached on legislation to enact a $700 billion bailout of the country’s financial system.

In making the announcement, legislators said the public could view the agreement at financialservices.house.gov.

“In a short period of time, lots of Web users were rushing to the digital doorway to get a copy of this thing,” Ventura told CNN in a phone interview.

As millions of people tried to look at the details of the bailout plan, the House.gov system became overwhelmed and many people saw notices on their computer screens saying “this page does not appear.”

Ventura compared the situation to the “old days, when you listened to a radio show and the 10th caller got a toaster. Then everyone calls the same 1-800 number at the same time and all you got was a busy signal.”

“This was a massive digital busy signal,” he said.

As more people gained access to the page and details of the bailout proposal were published in the news media, constituents then started to e-mail their representatives, Ventura explained.

“We know it’s in the millions,” he said of the number of e-mails that lawmakers in the House have been receiving. “But we haven’t counted yet, because when you’re about to get hit by a tidal wave, you don’t count the drops of water in the wave.”

After the House failed to pass the proposed deal Monday by a vote of 228-205, the e-mail volume surged again, Ventura said.

“Because there were so many e-mails, it was impacting even the presentation of House.gov,” he explained.

“This morning, our engineers sounded the alarms … and we have installed a digital version of a traffic cop. We enacted stopgaps that we planned for last night. We had hoped we didn’t have to.”

The office of the chief administrative officer of the House of Representatives issued a statement Tuesday saying: “This measure has become temporarily necessary to ensure that congressional Web sites are not completely disabled by the millions of e-mails flowing into the system. Engineers are working diligently to accommodate this enormous traffic flow and we appreciate your patience in this matter.”

Now, when House.gov or individual members’ sites begin to get overloaded, a message will come up on the computer screen saying, in effect, “try back later,” Ventura said.

“This really tells us that the level of constituent engagement on this issue is extremely high,” he added.

He said after the failed vote Monday and the initial backlash, the House’s Web site administrators thought there would be a drop in Web traffic — especially with the Rosh Hashanah holiday.

“We monitored the situation all night long, and technicians and engineers saw that we were facing the same demand as yesterday,” Ventura said.

He predicted that traffic on those Web sites “would start to subside once there’s some guidance on the marketplace and political landscape about what comes next.”

Ventura said the House.gov Web site experienced a very high number of hits when the 9/11 commission released its final report on the September 11, 2001, terror attacks against the United States, but nothing like what the site has seen in the past few days.

Political Leaders and Pundits Are Clueless About Bailout Rejection

By Richard C. Cook

SEPTEMBER 30, 2008­ Stephen Pearlstein is the Washington Post’s Pulitzer Prize-winning business columnist. In print and as a TV talking head­ – like on Chris Matthews’ Hardball late last week­ – Pearlstein is one of the foremost media cheerleaders for the $700 billion Wall Street bailout bill.

Or should we call it the Bush-Paulson-McCain-Obama-Pelosi-Reid-Dodd-Frank Wall Street bailout bill?

Nancy Pelosi and the rest of the leadership of the Democratic majority in Congress have become the indispensable partners in Bush administration travesties. First it was funding for the Iraq War. Now it’s lavishing rewards on the Wall Street “Masters of the Universe,” who, coincidentally, have been the financial mainstay of the Democratic Party since the Clinton years.

The TV networks are filled this morning with commentators who are sneering about how a majority of congresspeople voted to save their political butts in the face of the upcoming congressional elections. Political expediency, say the financier-owned media, trumped principle, when the House defeated the bailout bill yesterday by a vote in which 67 percent of the Republicans and 60 percent of the Democrats voted “No.”

The “principle” in this case is that of the loaded gun which Wall Street is holding to Main Street’s head. “Bail us out or no more loans,” Wall Street says in this alleyway mugging. And no more loans seemingly would be a disaster, because for the last quarter century it’s primarily been borrowed money Main Street has been living on.

But maybe Main Street is willing to call Wall Street’s bluff­on principle.

Here’s where Pearlstein enters the picture. His column in the Post this morning is as condescending as it can be. The title? “They Just Don’t Get It.”

Pearlstein writes: “Americans fail to understand that they are facing the real prospect of a decade of little or no economic growth because of the bursting of a credit bubble that they helped create and that now threatens to bring down the global financial system.”

Here’s what Pearlstein doesn’t get: The only reason there has been economic growth in the last seven years has been due to the housing bubble the Bush administration and Federal Reserve chairman Alan Greenspan created to get us out of the crash of the dot.com bubble in 2000-2001.

The reason these bubbles have been needed is that the United States over the last generation gave away millions of its good manufacturing jobs to foreign nations in order to further the greed of global finance capitalism. So the only way people have been able to live has been through credit bubbles that have the added disadvantage of inflating the prices of assets, including their homes. This is another benefit of the housing bubble: For a home that once cost $120,000, a family is paying a $300,000 mortgage. If they want to sell, they would be lucky to get $200,000, less brokers’ and bankers’ fees.

Pearlstein again: “Politicians worry less about preventing a financial meltdown than about ideology, partisan posturing and teaching people a lesson. Financiers have yet to own up publicly to their own greed, arrogance and incompetence. And leaders of foreign governments still think that this is an American problem and that they have no need to mount similar rescue efforts in their own countries.”

To call what a majority of the House of Representatives did yesterday in voting down the bailout an action based on “ideology, partisan posturing and teaching people a lesson” is a slur on American democracy. It shows what we already know: the Washington Post is really a house organ of the financial elite. And in dissing what is really part of a widespread populist uprising against financial abuses which have produced a condition approaching debt slavery for a majority of the U.S. population, Pearlstein shows a lack of respect that is typical, though appalling.

His prescription? “And they will come around, reluctantly, to the understanding that the only way to get out of these situations is to have governments all around the world borrow gobs of money and effectively nationalize large swaths of the financial system so it can be restructured, recapitalized, reformed and returned to private ownership once the crisis has passed and the economy has gotten back on its feet.”

In other words, Pearlstein is really a Keynesian. Governments need to “borrow gobs of money and effectively nationalize large swaths of the financial system.” This means trillions added to the national debt.

But in the point about nationalization there is a glimmer of truth, though not the way Pearlstein means it. For he is wrong in thinking that this particular bailout bill which rewards years of greed, criminality, and government collusion in private banking swindles is the way to proceed. Neither is it right for the government to administer bad bankers’ debts while already the big banks that leveraged the terrible investment decisions­ – Citibank, the Bank of America, and J.P. Morgan Chase – ­are getting off scot-free and adding to their empires by gobbling up the small fry.

What then should be done?

Here I would like to turn to a proposal by a man I have met and respect. His name is Darrell Castle, and he is the 2008 candidate for vice-president of the Constitution Party. Castle has spent the last year traveling around the country meeting people on Main Street and listening to what they have to say.

This is what Castle proposes in the Constitution Party’s latest newsletter:

“The Federal Reserve Banks should be seized by Congress under Article 1 Section 8 of the Constitution. The FED banks could survive as clearinghouse banks, but the Federal Reserve that has robbed the American people for 100 years would cease to exist. The debt owed by the American people to the FED banks would be discharged in bankruptcy. Congress would take monetary policy from the FED and would simply stand in place of the FED through a monetary board. The FED credit computers would be transferred to Congress who would issue new credit (money), because under our present system 97% of all money originates as credit. This new credit would keep the system going and prevent collapse. It could all be done without interest and without debt. The backs of the international banking cartel would be broken forever, and the American people through their elected representatives would control monetary policy; i.e. money in circulation, interest rates, and credit availability.”

Pearlstein, Bush, Paulson, Pelosi, et.al., along with Obama and McCain, should also read the U.S. Constitution. Then they would see that the problem stems from the fact that in 1913 Congress privatized our money supply by turning it over to the private banks that own the Federal Reserve System. This is also why we have lived under the mass delusion that a healthy financial sector leads to a healthy producing economy.

Actually it’s the other way around. The financial sector should support the producing economy, not bleed it dry through interest, fees, commissions, and the destruction that arises from financial profit-seeking.

There is also the fact that while the producing economy has been hammered by job outsourcing and bled white by financial parasitism, it is still a powerful machine that can produce the goods and services people need. We are a strong, capable nation. And we are blessed with the resources we require for a decent standard of living, though not necessarily at a rate of consumption that forever outpaces the rest of the world. But what is wrong with that? The underlying strength of the producing economy was on display this morning, when the Dow-Jones defied the doomsayers by coming back strongly the day after the bailout was defeated.

We now need to do what Darrell Castle of the Constitution Party recommends: Use the power of the money supply to rebuild the producing economy that we have given away and rebuild it from the bottom up: from Main Street.

Unfortunately the fat cats and their political and media apologists “just don’t get it.” But the American people and the members of congress who voted the right way yesterday do.

Copyright 2008 by Richard C. Cook

You’re going to LOVE this woman –