Archive for the ‘Financial Markets Bail-out’ 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.
By Binyamin Appelbaum
Washington Post Staff Writer
Wednesday, October 15, 2008; A01
Community banking executives around the country responded with anger yesterday to the Bush administration’s strategy of investing $250 billion in financial firms, saying they don’t need the money, resent the intrusion and feel it’s unfair to rescue companies from their own mistakes.
But regulators said some banks will be pressed to take the taxpayer dollars anyway. Others banks judged too sick to save will be allowed to fail.
The government also said yesterday that it will guarantee up to $1.4 trillion of private investment in banks. The combination of public and private investment is intended to refill coffers emptied by losses on real estate lending. With the additional money, the government expects, banks would be able to start making additional loans, boosting the economy.
President Bush, in introducing the plan, described the interventions as “limited and temporary.”
“These measures are not intended to take over the free market but to preserve it,” Bush said.
On Capitol Hill, lawmakers from both parties praised the plan and scrambled to take credit for writing provisions into the law passed almost two weeks ago that allowed the government to switch from buying bad loans to buying ownership stakes in banks.
On Wall Street, bank stocks soared even as the broader market stayed flat while investors grappled with economic concerns. The Dow Jones industrial average was down 0.82 percent, or 76.62 points, to close at 9310.99 one day after its largest percentage gain in more than half a century.
And in offices around the country, bankers simmered.
Peter Fitzgerald, chairman of Chain Bridge Bank in McLean, said he was “much chagrined that we will be punished for behaving prudently by now having to face reckless competitors who all of a sudden are subsidized by the federal government.”
At Evergreen Federal Bank in Grants Pass, Ore., chief executive Brady Adams said he has more than 2,000 loans outstanding and only three borrowers behind on payments. “We don’t need a bailout, and if other banks had run their banks like we ran our bank, they wouldn’t have needed a bailout, either,” Adams said.
The opposition suggested that the government may have to continue to press banks to participate in the plan. The first $125 billion will be divided among nine of the largest U.S. banks, which were forced to accept the investment to help destigmatize the program in the eyes of other institutions.
In rolling out the program, Treasury said it would make the rest of the money available to banks that requested it. Officials said they expected thousands of banks to participate.
But both the American Bankers Association and the Independent Community Bankers of America said that they knew of few banks that planned to participate.
“I’m not sure we’ve heard from any that want to participate,” said Karen Thomas, vice president for government relations at the community bankers group, which represents about 5,000 banks. “That said, if any community banks do enroll, we anticipate it will be just a small minority.”
Federal regulators said they did expect some banks to volunteer, though none stepped forward yesterday. But they added that they would not rely on volunteers. Treasury will set standards for deciding which banks can be helped, and the regulatory agencies will triage the banks they oversee: The institutions faring best and worst will not receive investments. The institutions in the middle, whose fortunes could be improved by putting a little more money in the bank, will be pushed to accept the money from the government.
“We will encourage institutions to apply,” said John C. Dugan, the comptroller of the currency, who oversees most of the nation’s largest banks.
In return for its investments, Treasury will receive preferred shares of bank stock that pay 5 percent interest for up to five years. After that, if the companies haven’t repaid the government’s initial investment, the interest rate goes up to 9 percent.
Participating banks cannot increase the dividends they pay to shareholders without federal permission, they must accept some limitations on compensation for their executives, and Paulson said the government would press companies to limit mortgage foreclosures.
The government decided not to impose an explicit requirement that banks use their taxpayer dollars to increase lending. But regulators said they will watch banks closely. They also noted that banks have less reason to hoard money now that they can borrow more easily. Most important, however, they said, banks want to make money.
“And the way that banks make money is by lending,” Dugan said.
Also yesterday, the Federal Deposit Insurance Corp. said it will create, essentially, two new insurance programs.
The basic insurance program still guarantees all bank deposits up to $250,000. A new supplemental program guarantees all deposits above $250,000 in accounts that don’t pay interest. The program basically covers accounts used by small businesses.
Some European governments had already guaranteed deposits, creating a competitive advantage for banks in those countries. Banking regulators also were concerned that small businesses were transferring deposits from community banks to larger institutions perceived as less likely to fail. Finally, small businesses contributed to the failure of Washington Mutual and the collapse of Wachovia by pulling uninsured deposits from those banks.
The FDIC estimates that this new guarantee could cover up to $500 billion in deposits. Banks that sign up for the insurance — and bankers agree that everyone will participate, for fear of ceding an advantage to rivals — will pay a premium of 10 cents on every $100 in deposits.
The combination of the existing and new guarantees will cover about 80 percent of the $7 trillion in deposits at the nation’s banks. The bulk of the uninsured deposits are held in interest-bearing accounts, such as certificates of deposit, that tend to be marketed and regarded as investment products.
Sheila C. Bair, chairman of the FDIC, said the agency considered guaranteeing all bank deposits but decided that any potential benefit was outweighed by the risk that a guarantee on interest-bearing accounts would attract a huge inflow of deposits currently held in money-market mutual funds.
“We’re trying not to stabilize one part” of the financial system “and destabilize another part,” she said.
Separately, the FDIC is creating an insurance program to encourage investment in banks by guaranteeing that investors won’t lose money. Participating banks will pay the FDIC a fee of 75 cents on each $100 in debt that they sell to investors. The FDIC will guarantee through June 2012 the debt issued by participating banks before the end of June 2009. If the bank goes bankrupt, or defaults on its debt, the FDIC will pay the investors.
To prevent banks from running up massive debts on the government’s tab, the program limits banks to a 25 percent increase from their current level of borrowing. The FDIC estimates that the maximum amount of debt that banks could issue under the program is about $1.4 trillion.
Bair also said that the FDIC may refuse to guarantee debt issued by banks with financial problems, though she declined to discuss specific criteria.
Bair acknowledged that the new guarantees shelter banks from the immediate consequences of misbehavior because depositors and investors have no incentive to remove their money from an institution if they know that the government stands behind it.
But Bair said the government’s first priority was to stabilize the industry.
“The risks of moral hazard were simply outweighed by the need to act and act dramatically and act quickly,” Bair said.
Dugan offered a slightly different perspective.
“It just means we’ve lost one tool and we’re going to have make sure that we compensate,” he said.
Staff writers Paul Kane, Lori Montgomery and Peter Whoriskey contributed to this report.
BILL MOYERS:Welcome to the Journal.
You are not alone if you are worried about the financial melt down. So is my guest George Soros, one of the world’s best known and successful investors, making billions in times of boom or bust. He’s been warning for years of a financial melt down fueled by easy credit and sleepy regulation. Now he’s out with this timely book, “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.”
In the interest of full disclosure, you should know that I served three years on the board of George Soros’ foundation, the Open Society Institute, dealing with such issues as a free press, the rule of law, and human rights. But I’ve had no involvement in his political activities and nothing to do, with his business interests unfortunately. It’s good to see you.
GEORGE SOROS:Same here.
BILL MOYERS:Let’s imagine for a moment that we’re not in a New York studio but we are in Neely’s Barbecue Stand in Marshall, Texas, my hometown, and we’re surrounded by people I know, people who have lost half of their 401(k)s in the last three or four weeks, and what they want to know is does this financial meltdown represent the end of the American dream as they have known it.
GEORGE SOROS:No. No. I think it’s got nothing to do with the American dream as such. There has been some kind of an ideological excess; namely, market fundamentalism for the last 25 or so years. And now that world is collapsing…
BILL MOYERS:What do you mean “market fundamentalism”?
GEORGE SOROS:It’s that markets will correct themselves, that you should leave it to the markets, and there is no need for government intervention in financial affairs. Letting markets run rampant. And that doesn’t work.
Markets have the ability to adjust and they’re very flexible. There is this invisible hand. But it is also prone to be mistaken. In other words, markets instead are reflecting reality. They always look at reality with a bias. There is always a prevailing bias. I’ll call it, you know, optimism/pessimism.
And sometimes those moods actually can reinforce themselves so that there are these initially self-reinforcing but eventually unsustainable and self-defeating boom/bust sequences or bubbles. And this is what has happened now.
This current economic disaster is self-generated. It was generated by the market itself, by getting too cocky, using leverage too much, too much credit. And it got excessive.
BILL MOYERS:You used the word “disaster.”
GEORGE SOROS:The financial system is teetering on the edge of disaster. Hopefully, it will not go over the brink because it very rarely does. It only did in the 1930s. Since then, whenever you had a financial crisis, you were able to resolve it. This is the most serious one since the 1930s, there hasn’t been one as serious as this.
Unfortunately, the authorities are behind the curve. They are reacting to these crises as they emerge. One thing leads to another, one market after another gets into difficulty. And they react to it. And they don’t quite understand what’s hitting them. So they are not anticipating and not gaining control of the situation.
BILL MOYERS:This is what’s interesting, why wouldn’t the government be able to look at what you looked at and see what’s coming?
GEORGE SOROS:Because actually they have been working on false premises. This sounds very strange, but there’s been this development of, this belief of market fundamentalism. And particularly the idea that markets always revert to the mean and deviations from the mean occur in a random fashion. And you can calculate it.
And you will get a nice distribution and you can anticipate it. And based on that, you can manage your risk. And that actually was based on a false idea. This namely, the markets self-correcting because the market moods have a way of affecting the fundamentals the markets are supposed to reflect.
And there’s always a divergence between our perception and what actually exists. For instance, take the simplest situation, namely housing.
Banks give you credit based on the value of the houses. But they don’t seem to somehow understand that the value of the houses can be affected by the amount of credit they are willing to give. Now, we’ve developed these fabulous new ways of securitizing mortgages, which has made credit much more amply available.
And we’ve been able to calculate risk. And, therefore, we were willing to give more and more credit. And that has pushed up the value of the houses. Also, of course Greenspan kept interest rates too low, too long. And so you had very low interest rates, easy credit, and house prices have been appreciating at more than ten percent a year for a number of years. And the willingness to lend actually increased. There was an insatiable appetite for these new fangled securities.
BILL MOYERS:Yeah. Nobody understood, really.
GEORGE SOROS:Which they didn’t properly understand. And there was always a separation between the people who generated the mortgages and packaged them and sold them to you and the people who owned them. So nobody was paying attention to the quality of the mortgages because they didn’t have an interest. They — all day collecting fees. And then there were other people holding the mortgages.
GEORGE SOROS:And that was not factored into those instruments. The idea was that by distributing risk, you actually reduce risk. But by separating the principal from the agent, you actually greatly increase the risk. And that was not reflected. And the rating agencies didn’t realize it. So they gave triple-A ratings. And then a few weeks later, those triple-A bonds became practically valueless. And that’s what has happened.
BILL MOYERS:But how does the system become deranged like that? So separated from reality like an individual who goes insane because he or she is separated.
GEORGE SOROS:Well sometimes we get carried away. I mean, you know, let’s say in the Middle Ages, people were religious. And so they had tremendous discussions about how many angels can dance on the eye of a needle. Now, if you believe that angels can dance then that’s a legitimate question. And this is exactly what has happened here. You thought that you could slice and dice and engage in this kind of financial engineering. And it became very, very sophisticated and got carried away.
BILL MOYERS:What happened that we lost control?
GEORGE SOROS:There was a failure of regulations because they couldn’t understand these new instruments. But they said, “Oh, well, the banks have very good risk management techniques. So we leave it to them to calculate their own risks.”
And, you see, it wasn’t only in the housing market. There were all kinds of other financial instruments. So there was not just one bubble. I describe in my book there is the housing bubble. But this housing bubble, when that burst, it was only the detonator that exploded the bigger bubble, the super bubble.
Which is this 25 years of constant credit expansion using greater and greater leverage. The amount of credit in the economy has been growing at, I don’t know, I don’t know the exact figure, but maybe at least twice as fast as the economy itself. I think it’s more like three.
And now, suddenly, you have a contraction of credit. And it’s a sudden thing. And it’s a period of great wealth destruction. And that’s how these poor people in Texas suddenly find that their 401(k) is worthless.
BILL MOYERS:So as we talk, Secretary Paulson and the government seem to be coming around to what you’ve been advocating and that is taking taxpayer money, public capital, and injecting it directly into the banks — in effect, nationalizing some of these banks. Why do you think that will work when everything else has failed?
GEORGE SOROS:Well unfortunately because they are delaying it, it may not work so well because there’s a certain dynamism. And they’re always behind the curve. So there are many things that they’re doing now if they had done several months ago, it would have turned things around.
BILL MOYERS:That’s a very gloomy assessment. You’re saying that everything they’re doing is coming too late? How does that ultimately play out?
GEORGE SOROS:Unfortunately, that is the case. I’m quite distressed about it. I hope that you know, eventually they’ll catch up.
We are determined to put the money in, not to allow the financial system to collapse. And that’s the lesson we learned in the 1930s. It’s an important lesson. But because we are behind the curve, the amounts get bigger and bigger. If we understood it earlier, we could have brought it to a halt perhaps sooner. But they’ve got still a number of things to do. And this idea, you see, of just buying noxious instruments of you know, off the balance sheet of the banks was a non-starter.
BILL MOYERS:But that was the idea.
GEORGE SOROS:But it was the wrong idea.
BILL MOYERS:But this is disturbing, George. If everything we’re doing keeps accelerating the downward negative feedback and isn’t working, are you suggesting, can one insinuate from what you say that we’re heading for 1930?
GEORGE SOROS:Hopefully not. But we are heading for undoubtedly very difficult times. This is the end of an era. And this is a fact.
BILL MOYERS:End of an era?
GEORGE SOROS:At the end of an era.
BILL MOYERS:Capitalism as we have known it?
GEORGE SOROS:No. No, no, no. Hopefully, capitalism will survive. But the sort of period where America could actually, for instance, run ever increasing current account deficits. We could consume, at the end, six and a half percent more than we are producing. That has come to an end.
BILL MOYERS:So what do we do now?
GEORGE SOROS:We are probably at the height of the financial crisis. I think it can’t get much worse. I think it could get a bit worse yet. But then you have the fallout in the real economy.
BILL MOYERS:We’re in a downward spiral.
GEORGE SOROS:We are in a downward spiral.
BILL MOYERS:How long will it go on?
GEORGE SOROS:Look the one thing that my theory says is that you can’t predict the future because the future depends on how you react to it. So if we do the right things then things will not — will be less painful. If you do the wrong things, they’ll be more painful. Now, so far we’ve been doing the wrong things. I very much hope that we’ll have a different government in a few months and they’ll be doing the right things.
BILL MOYERS:Well, don’t be shy. What do you think the new government should do?
GEORGE SOROS:Well, first of all you have to prevent housing crisis from overshooting on the downside the way they overshot on the upside. You can’t arrest the decline, but you can definitely slow it down by minimizing the number of foreclosures and readjusting the mortgages to reflect the ability of people to pay. So you have to renegotiate mortgages rather than foreclose.
And you provide the government guarantee. But the loss has to be taken by those who hold the mortgages, not by the taxpayer.
BILL MOYERS:You mean the homeowner doesn’t take the loss. The lender.
GEORGE SOROS:The homeowner needs to get relief so that he pays less because he can’t afford to pay. And the value of the mortgage should not exceed the value of the house. Right now you already have 10 million homes where you have negative equity. And before you are over, it will be more than 20 million.
BILL MOYERS:But, you’re talking about taking action three months from now, whether it’s a McCain administration or an Obama administration. What happens in these next three months? And I’m serious about that.
GEORGE SOROS:I am very worried about it. And I hope that they will have a new secretary of treasury, somebody else.
BILL MOYERS:Sooner than later?
BILL MOYERS:You don’t think…
GEORGE SOROS:It would be very helpful if…
BILL MOYERS:You don’t think Paulson’s up to it?
GEORGE SOROS:Unfortunately, I have a negative view of his performance.
GEORGE SOROS:Because he represents the very kind of financial engineering that has gotten us into the trouble. And this buying off the noxious things was a…
BILL MOYERS:Buying the bad assets, that was his…
BILL MOYERS:First idea.
GEORGE SOROS:Yeah, and before that, he wanted to create a super SIV, special investment vehicle, to take care of the other special investment vehicles. That didn’t fly. And they are now within a week recognizing that they have to change and inject money into the banks to make up for the whole in the equity because those banks lost money. And they can’t make it up by taking their assets off their hands. You have to recognize the losses and replenish the equity.
BILL MOYERS:Is that what you would do with the bailout money now? Right now?
GEORGE SOROS:Yes, yes, yeah.
BILL MOYERS:You would put it where?
GEORGE SOROS:Into the capital of the bank so that the capital equity can sustain at least 12 times the amount of lending. So that’s an obvious thing. And every economist agrees with this.
You see, what is needed now the bank examiners know how those banks stand. And they can say how much capital they need. And they could then raise that capital from the private market. Or they could turn to this new organization and get the money from there. That would dilute the shareholders. It would hurt the shareholders.
BILL MOYERS:Of the bank?
GEORGE SOROS:Of the banks. Which I think Paulson wanted to avoid. He didn’t want to go there. But it has to be done. But then, the shareholders could be offered the right to provide the new capital. If they provide the new capital then there’s no dilution. And the rights could be traded. So if they don’t have the money, other people could, the private sector could put in the money. And if the private sector is not willing to do it then the government does it.
BILL MOYERS:The assumption of everything you say is that the government is going to be a big player now in the economy and in the financial markets. But what assurance do we have that the government will do a better job?
GEORGE SOROS:We don’t. Right now they are doing a bad job. So you want to use the government as little as possible. The government should play a smaller role. In that sense, people who believe in markets, I believe in markets. I just want them to function properly. To the extent you can use the market, you should use the market.
Governments are also human. They’re also bound to be wrong. Moreover, they are bureaucratic. So they are slow and they are subject to political influence. So you want to use them as little as possible. But to not to use them, see, assumes that markets are perfect. And that is a false belief.
BILL MOYERS:Has the whole global system become so complex with such gargantuan forces interlocked with each other, driving it forward, that it doesn’t know how to obey Adam Smith’s natural laws?
GEORGE SOROS:No, I think our ability to govern ourselves doesn’t keep pace with our ability to exercise power over nature, control over nature. So we are very complicated civilization. And we could actually destroy our civilization because of our inability to govern ourselves.
BILL MOYERS:Would this all be happening if we still had a strong sense of the social compact? I mean, our social safety net has been greatly reduced. The people have a real sense that the gods of capital have left little space for anyone else. People at the top don’t have much empathy for people at the bottom.
GEORGE SOROS:There is a common interest. And this belief that everybody pursuing his self-interests will maximize the common interests or will take care of the common interests is a false idea. It’s a suitable idea for those who are rich, who are successful, who are powerful. It suits them to justify you know, enjoying the fruits without paying taxes. The idea of paying taxes is an absolute no-no, right?
GEORGE SOROS:Unpatriotic. So, yes, you must have, in my opinion, you need, for instance, a tax on carbon emissions. But that is unacceptable politically. So we are going to have cap and trade. And the trading will have all kinds of loopholes and misuse of the regulations and all kinds of ways of making money without actually dealing with the problem that it’s designed to cure. So that’s how the political process distorts things.
BILL MOYERS:So let’s think about those people down at Neely’s Barbecue going home tonight having heard you. What they’ve heard you say is the system is really disfunctioning right now. It’s out of control. Nobody’s in charge. They’ve heard you express your own worry that in the next three months it could get much, much worse.
And they’ve heard you say that you don’t see much good news immediately on the horizon. So let’s leave them something to think about as they go home. Let them go home and say, “Mr. Soros said here are three things we can do, simply.” One?
GEORGE SOROS:Well, deal with the mortgage problem. Reduce foreclosures. Recapitalize the banks. And then work on a better world order where we work together to resolve problems that confront humanity like global warming. And I think that dealing with global warming will require a lot of investment.
You see, for the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished. It’s run out of — can’t continue. You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come.
BILL MOYERS:Putting more money in, building infrastructure, converting to green technology.
GEORGE SOROS:Instead of consuming, building an electricity grid, saving on energy, rewiring the houses, adjusting your lifestyle where energy has got to cost more until it you introduce those new things. So it will be painful. But at least we will survive and not cook.
BILL MOYERS:You’re talking about this being the end of an era and needing to create a whole new paradigm for the economic model of the country, of the world, right?
BILL MOYERS:One of the British newspapers this morning had a headline, “Welcome to Socialism.” It’s not going that way, is it?
GEORGE SOROS:Well, you know, it’s very interesting. Actually, these market fundamentalists are making the same mistake as Marx did. You see, socialism would have worked very well if the rulers had the interests of the people really at heart. But they were pursuing their self-interests. Now, in the housing market, the people who originated the houses earned the fee.
And the people who then owned the mortgages their interests were not actually looked after by the agents that were selling them the mortgages. So you have a, what is called an agent principle problem in socialism. And you have the same agent principle problem in this free market fundamentalism.
BILL MOYERS:The agent is concerned only with his own interests.
GEORGE SOROS:That’s right.
BILL MOYERS:Not with…
GEORGE SOROS:That’s right.
BILL MOYERS:The interest of…
GEORGE SOROS:Of the people who they’re supposed to represent.
BILL MOYERS:But in both socialism and capitalism, you get the rhetoric of empathy for people.
GEORGE SOROS:And it’s a false ideology. Both Marxism and market fundamentalism are false ideologies.
BILL MOYERS:Is there an ideology that…
GEORGE SOROS:Is not false?
GEORGE SOROS:I think the only one is the one that I’m proposing; namely, the recognition that all our ideas, all our human constructs have a flaw in it. And perfection is not attainable. And we must engage in critical thinking and correct our mistakes.
BILL MOYERS:And that’s one…
GEORGE SOROS:That’s my ideology. As a child, I experienced Fascism, the Nazi occupation and then Communism, two false ideologies. And I learned that both of those ideologies are false. And now I was shocked when I found that even in a democracy people can be misled to the extent that we’ve been misled in the last few years.
BILL MOYERS:The book is “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means”. George Soros, thank you for being with me.
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.
The House passed the most recent version of the Bail-out Bill 263-171.
At about 3:25 in, this video shows how much some of these folks have taken – BOTH of our “choices” for President are part of this.
They think you don’t get it. We think they’re wrong. Keep calling and e-mailing!
Still Million Dollar a Month Salaries…
Still Tens of Billions to the Bank of China…
Be Skeptical of Senate Bailout Bill
All the Old Problems Remain
A Single Comprehensive Updated Article by Congressman Brad Sherman (D-CA)
October 1, 2008
• Taxpayers highly unlikely to recoup any of the costs under revenue provision
added last Sunday (page 2)
• Treasury will not use the new insurance powers added to the Bill last Sunday
• Tens of billions will go to foreign investors (page 3)
• Million-Dollar a month salaries will continue (page 4)
• Oversight Board can critique, not halt, any action (page 4)
• Few if any homeowners will get mortgage relief (page 4)
• All $700 billion can be spent by January 20, 2009 (page 5)
• Taxpayers will get little or no equity upside (page 6)
• Meaningful regulatory reform proposals will be subject to filibuster, delay, and
dilution (page 6)
• We have time to write a good bill (page 6)
Read Rep. Sherman’s full article here. (It’s a PDF so you can download and save it if you like. We did.)
Also – here’s Rep. Sherman discussing the fear tactics used to push this bill through –