Archive for the ‘Ben Bernanke’ Category
On August 17, 2007 – we posted the article below. In light of the events of the past few weeks, please take a few minutes and re-read this amazing piece of information.
In an e-mail received tonight –
Ladies and Gentlemen,
I propose to demonstrate that in accordance with Constitutional Law the Senate of the United States of America did tonight perpetrate an unlawful and illegal act to abrogate the right of citizens of the United States to vote as guaranteed in Article 15 Clause I of the Constitution. The Congress has revealed itself, our Constitution cannot be interpreted, as it took over ten years to pass and is written in the plain language which can be amended but not abridged. Currently, the United States Senators who voted yes to an amendment of House Resolution 1424 defeated in the house, never sent to the Senate, and overwhelmingly not approved by the constituency is an act of authority made “Under Color of Law”, a crime against the country – “Under Color of Representative Authority” – not condoned in title 42 and publishable as a treasonous offense and any such law is null and of no effect.
In accordance with Article I Section no money shall be drawn from the Treasury but in Consequence of Appropriations made by law under Article I Section 9 of the Constitution. Unless they have the appropriation in hand an identified they cannot draw from the Treasury.
Additionally, each member of the Senate voting yes on this alleged Bill did in fact, with full knowledge execute an illegal act under “Color of Law” – to pass as piece of revenue legislation by amendment with full knowledge that the Bill had been defeated in the House of Representatives just two days earlier. They have complete legal understanding that only a Bill that has been properly submitted by first receiving a majority of votes in the House of Representatives could be amended and passed by the Senate. This unbelievable act of the Senate even attempts to circumvent Article I Section 7 of the Constitution, the “Origination Clause.”
Further, the yeah votes “Under Color of Representation” denied and deprived the American citizen of constitutional rights under the 14th Amendment Section 1 and the 19th Amendment Clause I which collectively protect all right reserved to the citizens and rights not to be denied or abridged which are guaranteed under Article 9 of the Constitution. These in the Congress of the United States are bound by oath under Article 6 to support the Constitution and any act not supported in the constitution is a felony lawfully considered void and of no effect.
However, we can see the silver lining in this egregious act of lawlessness. These criminals in the Senate who signed to pass this bill have a responsibility to understand the procedural requirements necessary to pass such an amendment. House Resolution 1424 is an Amendment. Clearly it is labeled as an amendment. Constitutional procedure dictates that you can Amend a Bill that has been passed. You cannot Amend a Bill which failed to pass and was therefore not properly submitted. These people have declared themselves as traitors before God and the Citizens of this country. They have attempted to sell out this country to the public corporations by assuming their private debt without the consent of the Citizens of this country. Article 15 Section 1 of the Constitution states: “The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.” The rights of the citizens of this country to vote on this issue has clearly been abridged by this egregious act of the Senate.
To further state my interpretation of this act of the Senate, I refer to Amendment 14 Section 4 of the Constitution: “The validity of the public debt of the United States, authorized by law shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”
I ask each of you to send this information to your representatives so that they can understand that their constituents will not tolerate this unlawful act and will seek to unseat every single Senator who voted to pass this fraudulent bill.
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.
By Jonah Goldberg Sept. 30, 2008
On Sunday evening, Republican House Minority Leader John A. Boehner explained his considered opinion on the $700-billion Wall Street bailout plan: It’s a “crap sandwich,” he said, but he was going to eat it.
Well, it turned out he couldn’t shove it down his colleagues’ throats. The bill failed on a bipartisan basis, but it was the Republicans who failed to deliver the votes they promised. Some complained that Democratic Speaker Nancy Pelosi drove some of them to switch their votes with her needlessly partisan floor speech on the subject. Of course Pelosi’s needlessly partisan. This is news?
The Republican complaint is beyond childish. Democratic Rep. Barney Frank, a man saturated with guilt for this crisis, nonetheless was right to ridicule the GOP crybabies on Monday. “I’ll make an offer,” he added. “Give me [their] names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are and maybe they’ll now think about the country.”
Would that Frank had been imbued with such a spirit earlier. Frank, chairman of the House Financial Services Committee, has spent the last few years ridiculing Alan Greenspan, John McCain and others who sought more regulation for Fannie Mae’s market-distorting schemes — the fons et origo of this financial crisis. Now he says “the private sector got us into this mess.” His partner in crime, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), a chief beneficiary of Fannie Mae lobbyists’ largesse, claims this mess is the result of poor oversight — without even hinting at the fact he is in charge of oversight of banks. They sound like pimps complaining about the prevalence of STDs among prostitutes.
And let us not forget that the Democrats, with a 31-seat majority, could not get 95 of their own to vote for the bailout, largely because it didn’t provide enough taxpayer money to their left-wing special interests. Would that they thought about the country.
The one man who truly tried to treat this crisis like a crisis — McCain — was ridiculed by Senate Majority Leader Harry Reid, who implored him to come to Washington to help in the first place. And the news media, which now treat any Republican action that threatens a Barack Obama victory as inherently dishonorable, uncritically accepted the bald Democratic lie that McCain ruined a bipartisan bailout deal last Friday.
This is not to say that McCain knows what to do. Faced with an unprecedented financial crisis involving frozen global credit markets and a maelstrom of moral hazard, his standard response is to talk about wiping out earmarks and eliminating waste, fraud and abuse. Memo to Mr. McCain: Waste, fraud and abuse are the only things holding the system together at this point.
Obama is no better. The man has spent two weeks irresponsibly excoriating his opponent for saying the fundamentals of the economy are strong — a perfectly leaderly thing for McCain to have said during a panic. Then, campaigning in Colorado on Monday, the day the market plunged 777.68 points, Obama proclaimed: “We’ve got the long-term fundamentals that will really make sure this economy grows.”
Perhaps after Al Qaeda seizes Baghdad, a President Obama would finally declare, “Hey, we can win this thing!”
Meanwhile, President Bush, his popularity ratings stuck at below-freezing numbers, has decided to cling to Treasury Secretary Hank Paulson for warmth on the grounds that the vaunted former Goldman Sachs chair has the credibility to sell the solution to a problem he’s been exacerbating for 18 months. When a reporter for Forbes magazine asked a Treasury spokesman last week why Congress had to lay out $700 billion, the answer came back: “It’s not based on any particular data point.” Rather: “We just wanted to choose a really large number.”
There’s a confidence builder.
As for the reputedly free-market firebrands of the congressional GOP, with whom my sympathies generally lie, I cannot let pass without comment the fact that they controlled the legislative branch for most of the last eight years. Only now, when capitalism is in flames, does this fire brigade try to enforce the free-market fire codes without compromise.
I loathe populism. But if there ever has been a moment when reasonable men’s hands itch for the pitchfork, this must surely be it. No one is blameless. No one is pure. Two decades of crapulence by the political class has been prologue to the era of coprophagy that is now upon us. It is crap sandwiches for as far as the eye can see.
Ask your Representative and Senators how Basel II is impacting the bail-out – and why we haven’t heard anything about it on the “news.”
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. The purpose of Basel II, which was initially published in June 2004, is to create an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face. Advocates of Basel II believe that such an international standard can help protect the international financial system from the types of problems that might arise should a major bank or a series of banks collapse. In practice, Basel II attempts to accomplish this by setting up rigorous risk and capital management requirements designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Generally speaking, these rules mean that the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability.
In a stunning rebellion by rank and file members, the House of Representatives defied their party leaders Monday afternoon to reject President Bush’s colossal sweeping bailout of Wall Street.
“This is a huge cow patty with a piece of marshmallow stuck in the middle and I’m not going to eat that cow patty,” declared Rep. Paul Broun (R-Ga.) (Our emphasis.)
The Dow Jones industrial average fell 600 points, before rebounding slightly.
The measure went down 205 to 228 but party leaders were keeping the vote open to try to change enough minds to reverse the result.
The stunning vote came after three emotional hours of debate over the most sweeping government interference in the free market since President Franklin Roosevelt rewrote the American economy in the 1930s.
The bill, presented by Bush and Treasury Secretary Henry Paulson as a vital measure to save an economy heading for serious recession, was backed by Democratic and Republican leaders of both houses, as well as presidential candidates Barack Obama and John McCain.
As the debate began, Bush told lawmakers, “This is a bold bill that will keep the crisis in our financial system from spreading through our economy.”
Behind the scenes, administration officials were twisting arms, warning direly of financial crisis on Main Street if Wall Street doesn’t get help.
To win enough votes from rank-and-file Democrats and Republicans, party leaders said there was no choice but to vote for the bailout or see ordinary Americans lose their jobs and homes.
“The meltdown would begin, it is true, in a few square miles of downtown Manhattan. But before it was over, no small town in America would be untouched,” said Rep. Steny Hoyer (D-Md.), the Majority Leader.
But dozens of congressmen defied their leaders to vote against a bill that no one said they liked. (Our emphasis.)
Broun questioned why more government money should be thrown after the $200 billion given to Fannie Mae and Freddie Mac, the $85 billion used to save AIG and $30 to save Bear Stearns.
“This is the same old story. We’re just going further down the road,” he said.
Rep. Jeb Hensarling (R-Tex.) warned America was on a “slippery slope toward socialism.”
Illustrating the urgency of the matter, Wachovia sold itself to Citigroup this morning, another huge bank failure that means most of America’s deposits are now in the hands of just three banks: Citigroup, JP Morgan Chase and Bank of America.
In the last two weeks, Wall Street titans have fallen like dominos, from Lehman Brothers to Merrill Lynch to AIG to Washington Mutual.
The credit crisis was spreading across the world yesterday.
In London, regulators swooped in with a $280 billion seizure of mortgage lender Bradford & Bingley, sending UK stocks to a three-year low.
The sprawling Belgian-Dutch financial group Fortis also needed a bailout from Benelux
Washington’s big bailout aims to unfreeze short-term lending between banks and corporations by buying up the widespread housing-related bad debts that are paralyzing financial companies.
Do YOU have time to read the Bill that will change the financial landscape? Here it is.
You won’t @#$#&$%-ing believe this!
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
CONTACT YOUR SENATOR AND CONGRESS-PERSON NOW! THEY ARE NOT SAVING THE MARKETS – THEY ARE COVERING THEIR CRIMINAL ACTIVITIES AND YOU WILL PAY FOR IT! TELL THEM NOT TO VOTE FOR THE BAIL-OUT.
AND BY THE WAY – WHY CAN THEY FIND $700,000,000,000 TO BAIL OUT CROOKS, BUT CAN’T “FIX” NEW ORLEANS?!
The financial meltdown the economists of the Austrian School predicted has arrived.
We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy – all the capital misallocation, all the malinvestment – and prevent the market’s attempt to re-establish rational pricing of houses and other assets.
Last night the president addressed the nation about the financial crisis. There is no point in going through his remarks line by line, since I’d only be repeating what I’ve been saying over and over – not just for the past several days, but for years and even decades.
Still, at least a few observations are necessary.
The president assures us that his administration “is working with Congress to address the root cause behind much of the instability in our markets.” Care to take a guess at whether the Federal Reserve and its money creation spree were even mentioned?
We are told that “low interest rates” led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments – investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.
Not a word about any of that, of course, because Americans might then discover how the great wise men in Washington caused this great debacle. Better to keep scapegoating the mortgage industry or “wildcat capitalism” (as if we actually have a pure free market!).
Speaking about Fannie Mae and Freddie Mac, the president said: “Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.”
Doesn’t that prove the foolishness of chartering Fannie and Freddie in the first place? Doesn’t that suggest that maybe, just maybe, government may have contributed to this mess? And of course, by bailing out Fannie and Freddie, hasn’t the federal government shown that the “many” who “believed they were guaranteed by the federal government” were in fact correct?
Then come the scare tactics. If we don’t give dictatorial powers to the Treasury Secretary “the stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet.” Left unsaid, naturally, is that with the bailout and all the money and credit that must be produced out of thin air to fund it, the value of your retirement account will drop anyway, because the value of the dollar will suffer a precipitous decline. As for home prices, they are obviously much too high, and supply and demand cannot equilibrate if government insists on propping them up.
It’s the same destructive strategy that government tried during the Great Depression: prop up prices at all costs. The Depression went on for over a decade. On the other hand, when liquidation was allowed to occur in the equally devastating downturn of 1921, the economy recovered within less than a year.
The president also tells us that Senators McCain and Obama will join him at the White House today in order to figure out how to get the bipartisan bailout passed. The two senators would do their country much more good if they stayed on the campaign trail debating who the bigger celebrity is, or whatever it is that occupies their attention these days.
F.A. Hayek won the Nobel Prize for showing how central banks’ manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day – and which are being proposed, just as destructively, in our own:
Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.
To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection – a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end… It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.
The only thing we learn from history, I am afraid, is that we do not learn from history.
The very people who have spent the past several years assuring us that the economy is fundamentally sound, and who themselves foolishly cheered the extension of all these novel kinds of mortgages, are the ones who now claim to be the experts who will restore prosperity! Just how spectacularly wrong, how utterly without a clue, does someone have to be before his expert status is called into question?
Oh, and did you notice that the bailout is now being called a “rescue plan”? I guess “bailout” wasn’t sitting too well with the American people.
The very people who with somber faces tell us of their deep concern for the spread of democracy around the world are the ones most insistent on forcing a bill through Congress that the American people overwhelmingly oppose. The very fact that some of you seem to think you’re supposed to have a voice in all this actually seems to annoy them.
I continue to urge you to contact your representatives and give them a piece of your mind. I myself am doing everything I can to promote the correct point of view on the crisis. Be sure also to educate yourselves on these subjects – the Campaign for Liberty blog is an excellent place to start. Read the posts, ask questions in the comment section, and learn.
H.G. Wells once said that civilization was in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.
The are taking YOUR money and giving it to wealthy, unscrupulous, greedy people who have proven that they cannot manage money. They have made bad investments, taken HUGE salaries, purchased multi-million dollar homes – and are being bailed out by the very people they have cheated. What about that seems like a good idea to you?
It’s been called ‘financial socialism’, ‘socialism for the rich’, and ‘lemon socialism’. But whatever it’s called, the Bush administration ‘bailout’ for financial institutions is the greatest transfer of wealth from ordinary working people to the rich in world history.
The proposed program to buy a mountain of non-performing housing loans and other worthless assets from banks and finance companies will cost an estimated $700 billion to $1 trillion U.S. dollars.
This money will come from U.S. taxpayers, most of whom are ordinary workers. It amounts to taking around $2500 U.S. dollars, or 17,000 RMB, from every U.S. citizen – and giving it to the banks and finance companies.
The cost for each family of four is around $10,000 or 68,000 RMB. This money could have been used for health care, for improved education, for scientific research, for social welfare program; for environmental protect; or a myriad of other socially useful purposes.
Alternatively, it could have been used to cut taxes for ordinary people, or even to help them buy their houses. Instead it is being donated to banks and financial companies whose managements and owners are among the richest in the world. These measures represent a massive redistribution of socially -produced wealth from working and poor people to the rich.
Learning from China
The argument of the Bush administration – echoed faithfully by the U.S. media – is that there is ‘no other way’. The claim is that the U.S. system, and the jobs of U.S. workers within it, can only be safeguarded by this transfer of wealth to the banks.
In fact, this argument is incorrect.
Obviously the government must act to protect banking and finance in an economic crisis of this magnitude. But if banks are bankrupt or insolvent, a fair solution would be to buy or nationalize the banks themselves, *not* their bad debts. Then the taxpayers would receive something of value – a stabilized and accountable banking system belonging to the people instead of worthless debts.
In China, such a solution would seem almost common sense. With its socialist market economy growing at about 10% per year, Chinas’ government banks play a key role in providing a stable foundation for the financing of Chinese economic development,
But the possibility of taking over or nationalizing U.S. banks has not even been mentioned by any mainstream U.S. political figures or mainstream media.
Instead, up to a trillion dollars or taxpayer money is being donated to institutions whose managements have shown themselves incompetent to manage their own funds.
Perhaps the economic interests of the powerful wall street companies, one of whose former CEO’s is U.S. Treasury Secretary Henry Paulson, has something to do with this ‘blind spot’.`
Over the years China has resisted intense pressure from Paulson and other U.S. officials to radically deregulate its financial markets. They have lectured China repeatedly on how deregulation of financial markets, and letting foreign financial capital operate freely in China – as in the U.S. – was in Chinas best interests.
“An open, competitive and liberalized financial market can effectively allocate scarcer resources in a manner that promotes stability and prosperity far better than government intervention,” Paulson said in Shanghai in March last year. “Time is of the essence.”
Now even the U.S. has been compelled to abandon this ‘open financial markets’ approach. With the sub-prime crisis now expanded into a full-blown crisis in the western financial sector, knowledgeable Chinese experts are thankful that China never accepted this laisez fair prescription for financial regulation.
“The U.S. crisis reflects regulatory problems in the U.S. and innovative financial products that ignored basic economic rules,” former Chinese central bank deputy governor Wu Xiaoling told a financial conference in Beijing recently.”
“The U.S. crisis today would be China’s tomorrow if financial products such as securitization are introduced without proper risk-control measures.”
Chinas’ cautious attitude, government banks, and regulatory framework have helped China to restrict its losses and write-downs from the credit-market crisis to less than 1 percent of the massive global total.
The feasibility of bank nationalizations, closer regulation, and banning certain types of transactions, such as derivatives, which carry excessive risk are all lessons which can be learned from China.
Banks, financial companies, and the wealthy should not be allowed to unload their bad debts onto ordinary workers and taxpayers. It’s sheer madness to allow them to transfer a trillion dollars from workers and taxpayers to themselves.
By Eric Sommer