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The OTHER bailout: this one is clearly unconstitutional ...

While the world was preoccupied with legislation purporting to be  the Emergency Economic Stabilization Act of 2008, the Senate was busy passing another bailout bill – this one as a favor to the Hollywood moguls who are destroying our copyright system with the incessant cries of piracy.

The original copyright and patent laws were designed to encourage artists, writers,  inventors and others to share their works with the public. In exchange for allowing their works to enter the public domain, creators were given a  period of time to exclusively profit from the creations of the labor.

Corrupting the system …

Like the Wall Street Wizards who create nothing substantial, but profit on the labors of others when they create, market and trade securities, the Hollywood power structure became the distributors of the creative works of others. In many cases, hiring the actors, writers and others to produce a “work for hire” which they then copyrighted in their own name. And there is nothing wrong with that.

However, to avoid their works from falling into the public domain, they began plying members of Congress with campaign contributions and other inducements to enact longer and longer exclusive periods of time.

But, for those works that were already in the public domain, the created the fiction that is the Digital Millennium Copyright Act which allows any content, including materials in the public domain, to be secured with a electronic wrapper – and then criminalized breaking the electronic wrapper, even though the underlying content was either in the public domain or had already been purchased by the consumer in another form.

Respecting the system …

As a creator of content, I respect the need to protect one’s work for the period prescribed by law. However, I take great issue with those who want to sell the very same content over and over; but in different forms. Imagine buying a digital copy of a work and then being denied permission to use the content on your television and your computer. The key to controlling this type of usage lies in the pricing of the content delivery systems. Including a CD with a bound book for a slightly higher price is an excellent example of a value add that should appeal to consumers. Allowing the purchase of individual tracks of a CD for 99-cents, rather than being forced to purchase an entire album for an artificially set price of $12.95 or more.

Perverting the system …

However, the Hollywood distribution moguls were not content to merely control the content and the wrapper, they actively tried to inhibit the development and marketing of devices and media that would make the copying of digital materials easier for the masses. Note: the hackers have always been able to break encryption schemes and re-format the content into their preferred format. This did not dissuade the use of DRM (Digital Rights Management) Schemes which, in some cases, caused problems with computer and device operations. In a number of cases this resulted in hackers being able to hide malicious files on the host computer as the DRM software made these files invisible to the operating system.

Watermarking digital copies …

How many people really know that each Microsoft Word, Excel, and PowerPoint files along with PDF files created by Adobe’s software, as well as other software, contains an embedded unique identification number that can be tracked back to an individuals computer? Ditto for audio, video and other files sent by e-mail. Even today, copiers and printers embed coded characters that can identify the exact printer used to print the document. 

Protecting the franchise …

This led to the restriction in marketing digital tape recorders. This led to imposing a royalty on magnetic material to be collected by manufacturers and remitted to a government entity which was to divide and distribute it to the artists and others whose works might be infringed. I say might, as the great number of magnetic media actually were used for such things as computer backups and had nothing to do with pirating audio or video.

Skullduggery on both sides …

Both sides of the digital divide play dirty. We all know what hackers do, but how about the other side which has been known to bribe employees to compromise their employers. Or pay for stolen files that support their case. Or engaging in expensive show trials of people who ultimately were found to be innocent of infringement – but who suffered public humiliation and the loss of a great deal of money defending against baseless claims.

And it is getting worse …

Here we find the Hollywood crowd, mostly in the guise of trade associations such as the MPAA (Motion Picture Association of America) and the RIAA (Recording Industry Association of America), doling out the Washington political goodies.

This has resulted in the passage of  Senate Bill S. 3325 which is misleadingly named “Prioritizing Resources and Organization for Intellectual Property Act of 2008.”

Basically, this legislation was crafted to use the Department of Justice as a prosecutor of intellectual property infringement. And to seek monetary damages which would then be remitted to the content owner. Thus turning the DOJ into a combination enforcement and collection agency.

Nowhere is this power granted by the Constitution to the Federal Government as the government is charged with pursuing criminal infringement activities, not civil restitution claims.

The Attorney General agrees that this legislation would be inappropriate …

In a letter to Senators Patrick Leahy, Chairman, and Arlen Specter, Ranking Member, Senate Committee on the Judiciary, the Attorney General takes exception to the basic issues in Senate Bill S. 3225.

The Departments of Justice and Commerce have reviewed S.3325, the Enforcement of Intellectual Property Rights Act of 2008 ("EIPRA"), and truly appreciate the bill's intention to enhance the tools available for protecting intellectual property rights.

Nevertheless, we have strong and significant concerns regarding Titles I and IV. We are deeply concerned that the proposed legislation will undermine existing  intellectual property enforcement efforts by diminishing the effective use of limited criminal enforcement resources and creating unnecessary bureaucracy.

It will also improperly micro-manage the internal organization of the Executive Branch.

Accordingly, as outlined below, we strongly oppose S. 3325 as reported out of Committee on September 15, 2008.

We strongly oppose Title I of the bill, which not only authorizes the Attorney General to pursue civil remedies for copyright infringement, but to secure "restitution" damages and remit them to the private owners of infringed copyrights.

First, civil copyright enforcement has always
been the responsibility and prerogative of private copyright holders, and U.S. law already provides them with effective legal tools to protect their rights: they can obtain injunctions, 17 U.S.C. § 502; impound and destroy infringing articles, 17 U.S.C. § 503; recover their actual
damages and costs, 17 U.S.c. § 504(b); obtain statutory damages, which are similar to punitive damages, 17 U.S.C. § 504(c); and obtain their costs and attorney's fees in some circumstances, 17 U.S.C. § 505.

These tools also provide strong incentives for all copyright holders, including individual copyright holders and small businesses not represented by trade groups or industry organizations, to enforce their rights.

Second, Title I's departure from the settled framework above could result in Department of Justice prosecutors serving as pro bono lawyers for private copyright holders regardless of their resources.

In effect, taxpayer-supported Department lawyers would pursue lawsuits for copyright holders, with monetary recovery going to industry.

Third, the Department of Justice has limited resources to dedicate to particular issues, and civil enforcement actions would occur at the expense of criminal actions, which only the Department of Justice may bring.

In an era of fiscal responsibility, the resources of the
Department of Justice should be used for the public benefit, not on behalf of particular industries that can avail themselves of the existing civil enforcement provisions.

The Departments also strongly oppose Title IV of the EIPRA, which would move into the Executive Office of the President (EOP) from the Commerce Department the "U.S. Intellectual
Property Enforcement Coordinator" (IPEC) position
.

This Presidentially appointed IPEC would have primary responsibility for developing and coordinating Administration policy for IP enforcement across the Executive Branch. While the Administration has been a long time supporter of strong inter-agency coordination -- and is willing to work with the Committee on this topic -- the statutory creation of an EOP coordinator with the duties described in the bill constitutes a legislative intrusion into the internal structure and composition of the President's Administration. This provision is therefore objectionable on constitutional separation of powers grounds.

The Administration has taken strong steps over the past eight years to ensure effective coordination and enforcement of intellectual property rights. The Administration put in place the Strategy for Targeting Organized Piracy (STOP!) Initiative which is currently being implemented by the National Intellectual Property Law Enforcement Coordination Council (NIPLECC) and
led by the current U.S. Coordinator for Intellectual Property Enforcement. In summary, while we appreciate the need for continued coordination among Departments and agencies, the framework provided in the bill is unlikely to enhance criminal enforcement and, to the contrary, could pose significant and unnecessary challenges.

We look forward to working with the Committee to address these concerns. In the meantime, the Administration reserves judgment on the final bill. It is our hope that changes will be made so that the President's senior advisors can recommend that the President support the measure. The Office of Management and Budget has advised that there is no objection to the transmittal of this letter from the standpoint of the Administration's program

It gets worse …

Other bill provisions provide for seizing computers, especially servers, which are then forensically searched for infringing materials. In many cases, the fact that files have been routinely erased or erased using advanced file erasure programs has been characterized by trade association attorneys as being evidence of infringing activities or the destruction of evidence – although no proof of such activities exist.

In addition, the bill calls for the government to “Assist State and local law enforcement  agencies in enforcing those laws, including by reimbursing State and local entities for expenses incurred in performing enforcement operations, such as overtime payments and storage fees for seized evidence.”

There are a number of other highly objectionable provisions contained in the proposed legislation. Should you care to review the entire bill in context, it can be found at the end of this blog entry in the “Reference Links” section.

What can YOU do?

It is time to end the special relationship between the Hollywood distributors and the government. Especially in areas which diminish the public’s right to legitimately access and use content for which they have already paid; as well as eliminating the interference with the design and use of electronic devices. 

Piracy, at least in the United States, can be easily controlled by using the principle of value pricing. That is, the cost of the authorized version makes the time and cost of duplicating a work unrewarding. Continue to prosecute the infringement of intellectual property in both civil and criminal venues, as appropriate – and do not involve the Department of Justice in enforcing and prosecuting private civil matters. Personally, I like buying record tracks from Amazon.com for 99-cents rather than buying the entire CD or album.

Call your elected officials to demand they stop falling prey to Hollywood-based trade unions and passing unduly restrictive legislation which does nothing for the public interest.

Other than for permitted purposes and “fair use” exemptions, do not distribute  copyrighted material which deprives the creator of their rightful due. 

Contact Senator Leahy and express your displeasure with this legislation. Remember to be respectful as Senator Leahy is a champion of privacy and open government initiatives.

Sen Alexander, Lamar [TN]

Sen Bayh, Evan [IN]

Sen Bond, Christopher S. [MO]

Sen Boxer, Barbara [CA]

Sen Brown, Sherrod [OH]

Sen Cardin, Benjamin L. [MD]

Sen Clinton, Hillary Rodham [NY]

Sen Corker, Bob [TN]

Sen Cornyn, John [TX]

Sen Feinstein, Dianne [CA]

Sen Graham, Lindsey [SC]

Sen Gregg, Judd [NH]

Sen Hatch, Orrin G. [UT]

Sen Hutchison, Kay Bailey [TX]

Sen Levin, Carl [MI]

Sen Schumer, Charles E. [NY]

Sen Smith, Gordon H. [OR]

Sen Specter, Arlen [PA]

Sen Stabenow, Debbie [MI]

Sen Voinovich, George V. [OH]

Sen Whitehouse, Sheldon [RI]

-- steve

Quote of the day: “Somebody has to do something, and it's just incredibly pathetic that it has to be us.” -- Jerry Garcia

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius

Reference Links:

Senate Bill S. 3325


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


OBAMA & FANNIE MAE

It is no secret that the democrats created Fannie Mae and have always regarded the GSE as their personal piggy bank: securing multi-million dollar jobs for high-ranking democrats and using Fannie Mae’s power to purchase community assistance loans in political hotspots as a perk. Fraud, waste and corruption was the norm when Fannie was headed by liberal democrats.

When George Bush, John McCain or any other Republican tried to intervene, they were rebuffed by people like far-left liberal Representative Barney Frank. When Administration Agencies tried to audit Fannie Mae’s accounts, they were met with silence.

Now you can see for yourself how Fannie Mae pandered to House Democrats and the Black Caucus.

Remember Obama worked for ACORN which allegedly has a reputation for voter and financial fraud and which plans to receive substantial funds in any bailout bill.

Say no to the far-left liberal democrats who initiated this financial crisis. Say NO to Congressional democrats who were lobbied by Fannie Mae. And say NO to Barack Obama, another far-left liberal Chicago Machine politician.

Look what Obama and the rest of the democrats have done to Chicago – Is that the way you want to live?


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


Bailout: Waste, Fraud and Taxpayer Abuse Act of 2008 (Updated)

UPDATE: 09/29/08 HOUSE DEFEATS BILL ON FIRST PASS

The Associated Press is reporting ...

"The House has defeated the $700 billion bail-out legislation for the financial industry. More than enough members of the House had cast votes to defeat the Bush administration-pushed bill, but the vote was held open for a while, apparently as efforts were under way to persuade people to change their vote.On Wall Street, stocks plummeted as investors followed the developments in Congress."

The arrogance of Barney Frank and Nancy Pelosi are readily apparent as the House declines to pass this flawed bill. While the stock market's reaction in unfavorable, the bill will be modified and re-introduced. There is too much money and politics involved to walk away from a mass looting of the United States Treasury. It may be that the Congress will adjourn and take up the matter after the election when Administration outcomes and the participants may be clearer. In an Obama win, look for the bill to be significantly porked upwards with a corresponding rise in tax rates across the board. Obama's proposed tax cut for those making less than $250,000 amounts to a major increase in taxes on small business and will directly result in the loss of jobs to compensate for the increased costs of doing business. A point that does not seem to be easily grasped by those engaged in socialistic wealth redistribution to those who traditionally vote democrat.

Original blog entry ...

The democrat's so-called 110-page bi-partisan discussion draft of the bailout bill, now officially known as the “Emergency Economic Stabilization Act of 2008,” is now frozen in place; awaiting analysis and the cooperation of House Republicans who are required to give the democrats political cover for what is another example of creeping socialism and social engineering.

There is a partial answer – and it does not cost one cent!

Believe it or not, one of the most significant features of this legislation is the ability to suspend the “mark-to-market” accounting requirements which will allow the financial institutions to continue their charade of holding toxic securities on their books at some pre-authorized level; thus not triggering a call for additional core capital or being judged by the regulators to be either unsound or insolvent. This, in an of itself, will reduce the pressure on the financial institutions and allow them time to work out their problems using a combination of federally-guaranteed insurance for the toxic derivatives or apply for the purchase of non-performing mortgages and other underwater paper. 

A matter of trust …

One should remember that this current crisis is not about subprime mortgages or foreclosures; the root cause of the crisis is a declining housing market which failed to support any of the financial instruments predicated on home values.

Which is different from the current financial crisis which is caused by the lack of faith and trust in the balance sheets of financial institutions holding toxic securities which cannot be valued. Which results in financial institutions limiting lending to other financial institutions and the public; conserving their cash against unknown loan losses. Counterparties simply do not want to do business with other counterparties who do not have a strong enough balance sheet to back a major credit transaction. Example: although Bear Stearns was still salvageable, few wanted to keep large sums of their money on deposit with Bear Stearns and others were afraid of executing trades through Bear Stearns on the possibility that Bear Stearns would be unable to deliver the cash, securities or bonds necessary to complete the transaction – which left the counterparty twisting in the wind, liable to the customer who placed the trade. If anything killed Bear Stearns, it was a lack of trust. Same with IndyMac Bank and Washington Mutual. Few believed that these companies could survive in the coming days and acted accordingly. 

Looking at the bright side …

But there is a bright side. Many purchasers of assets during the Savings and Loan crisis, as well as the dot com bust, were able to transform those distressed assets into profitable income streams or enjoyed the profit when the asset was sold into an up-market which normally reappears after a downward cycle. Thus, some hedge funds are going crazy picking up so-called toxic paper at pennies-on-the-dollar.

The current bailout plan will help finance these continuing purchases for savvy investors such as Warren Buffett and others who know how to manage risk. And as an additional benefit of financing these purchases, toxic paper will be removed from financial institutions, confidence will be restored, trading will begin anew under more stringent guidelines and all will be right with the world. As with human nature, the rich will get richer and the taxpayer will foot the bill.

Milking the public’s cow …

Let us examine, not the financial provisions of the bill, but the normal tricks and techniques used by legislators to milk the public’s cow.

From the beginning …

All legislative bills start off with a high-sounding purpose and end with the authorization of loopholes and procedures leading to waste, fraud and taxpayer abuse. In this instance, the portion in red is indicative of what we can expect.

“To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes.”

You can drive a truck through the loophole left by the words “and for other purposes.”

Conflicts of interest …

Before we go much further, let us examine an important area of concern: conflicts of interest. You think, with the thousands of bills that have been crafted over time, that there would be an existing clear and concise definition of what constitutes a conflict of interest and the penalty prescribed under existing law for engaging in prohibited behavior. But it seems we are letting the Secretary of Treasury decide what constitutes a conflict of interest and there is no mention of any penalty for violating the public’s trust. Considering that nepotism and cronyism run rampant among current and former members of Congress, one is sure to find the Secretary making exceptions for political reasons. Somewhat like the democrats handling of the open doors of Fannie Mae which was considered by democrats to be a multi-million dollar patronage plum for those who benefited the democrat party. In this case the Secretary of Treasury is policeman, judge, jury and executioner with no appeal possible.

SEC. 108. CONFLICTS OF INTEREST -- (a) STANDARDS REQUIRED. —The Secretary shall issue regulations or guidelines necessary to address and manage or to prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this Act, including — (1) conflicts arising in the selection or hiring of contractors or advisors, including asset managers; (2) the purchase of troubled assets; (3) the management of the troubled assets held;  (4) post-employment restrictions on employees; and (5) any other potential conflict of interest, as the Secretary deems necessary or appropriate in the public interest.
(b) TIMING.—Regulations or guidelines required by
this section shall be issued as soon as practicable after
the date of enactment of this Act.

Make no mistake about it – this single act will produce quite a few millionaires, possibly a billionaire or two, and serve as an entry to the world of big money for those who can only be characterized as political hacks. The mere selection of vendors and managers will insure that there will be those who walk away with multi-million dollar, long-term, no-bid contracts that will make executive bonuses swell to almost pre-crisis levels. Executives will be given stock options and thus be insured that their firm’s stock will significantly rise when contracts are awarded. Since many of the vendors and managers chosen by the Secretary will have already been complicit in causing the problem, this seems like icing on top of the cake. And of course, this will all be kept as a gigantic secret as it involved “personnel” matters and the sanctity of the financial system. So we are already off to a bad start. Traditionally, when an oversight committee hires staff, one usually finds a bevy of well-compensated hyper-partisan lawyers who consider everyone not in the inner circle to be adversarial opponents. I would be greatly surprised if this were not the case in this particular instance. 

Can you say Halliburton …

Sec. 107. Contracting procedures.  (a) STREAMLINED PROCESS.—For purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest. Any such determination, and the justification for such determination, shall be submitted to the Committees on Oversight and Government Reform and Financial Services of the House of Representatives and the Committees on Homeland Security and Governmental Affairs and Banking, Housing, and Urban Affairs of the Senate within 7 days. 8 (b) ADDITIONAL CONTRACTING REQUIREMENTS.—In any solicitation or contract where the Secretary has, pursuant to subsection (a), waived any provision of the Federal Acquisition Regulation pertaining to minority contracting, the Secretary shall develop and implement standards and procedures to ensure, to the maximum extent practicable, the inclusion and utilization of minorities … and women, and minority and women-owned businesses … in that solicitation or contract,
including contracts to asset managers, servicers, property
managers, and other service providers or expert consultants.

We have all seen the effects of no-bid contracts in military contracting in Iraq and the complete disappearance of billions of dollars worth of cash and materiel. In addition, we have seen any number of shenanigans related to minority contracting involving incompetent people or front-organizations which siphon-off funds for work done by more traditional subcontractors. Considering this is one area where politicians, cronies and special interests abound, it remains to see if traditionally corrupt legislators and others can keep their hands out of the cookie jar. It’s a bet that I wouldn’t want to take.

Another oversight panel …

It will be extremely interesting to see who is appointed to this oversight panel and what their previous political connections and positions have been. Normally these positions are reserved for well-credentialed party hacks who do little more than follow the directives of their congressional masters. And while the prohibition against double dipping seems like protection for the taxpayers, note that it anticipates that one or more members could be sitting representatives of Congress or their staffs. Perhaps their salaries should be fixed in advance according to the standard government schedule and not left to the discretion of the Oversight panel. 

SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.
(a) ESTABLISHMENT.—There is hereby established
the Congressional Oversight Panel (hereafter in this section referred to as the ‘‘Oversight Panel’’) as an establishment in the legislative branch. (b) DUTIES.—The Oversight Panel shall review the current state of the financial markets and the regulatory system and submit the following reports to Congress: …
(c) MEMBERSHIP.— (1) IN GENERAL.—The Oversight Panel shall consist of 5 members, as follows: (A) 1 member appointed by the Speaker of the House of Representatives.
(B) 1 member appointed by the minority leader of the House of Representatives. (C) 1 member appointed by the majority
leader of the Senate. (D) 1 member appointed by the minority leader of the Senate. (E) 1 member appointed by the Speaker of the House of Representatives and the majority leader of the Senate, after consultation with the
minority leader of the Senate and the minority leader of the House of Representatives.
(3) PROHIBITION OF COMPENSATION OF FEDERAL EMPLOYEES.—Members of the Oversight panel who are full-time officers or employees of the United States or Members of  Congress may not receive additional pay, allowances, or benefits by reason of their service on the Oversight Panel.
(d) STAFF.— (1) IN GENERAL.—The Oversight Panel may
appoint and fix the pay of any personnel as the Commission considers appropriate
. (2) EXPERTS AND CONSULTANTS.—The Oversight Panel may procure temporary and intermittent services under section 3109(b) of title 5, United States Code. (3) STAFF OF AGENCIES.— Upon request of the Oversight Panel, the head of any Federal department or agency may detail, on a reimbursable basis,
any of the personnel of that department or agency to the Oversight Panel to assist it in carrying out its duties under this Act.

Transparency: now you see it … 

SEC. 114. MARKET TRANSPARENCY. 10 (a) PRICING.—To facilitate market transparency, the Secretary shall make available to the public, in electronic form, a description, amounts, and pricing of assets acquired under this Act, within 2 business days of purchase, trade, or other disposition. (b) DISCLOSURE.—For each type of financial institutions that sells troubled assets to the Secretary under this Act, the Secretary shall determine whether the public disclosure required for such financial institutions with respect to off-balance sheet transactions, derivatives instruments, contingent liabilities, and similar sources of potential exposure is adequate to provide to the public sufficient information as to the true financial position of the institutions. If such disclosure is not adequate for that purpose, the Secretary shall make recommendations for additional disclosure requirements to the relevant regulators.

Great, it appears that the public will get an Internet site to see the purchasing process within two days of the assets being acquired. But it will be the Secretary who determines whether the disclosure of derivatives, off-balance sheet transactions are sufficient to meet the public’s needs. But here is an interesting tidbit: if this disclosure is not adequate, he must make recommendations of additional requirements to the relevant regulators. So apparently, instead of the Secretary having control over the disclosure of information, the actual control of the disclosure may lie with the regulatory agencies (FED, FDIC, OCC, OTS, NCUA, and others) who are not normally open, transparent or willing to share information with the public. What is this all about? In addition, there appears to be some leeway for the Secretary to limit disclosure by “type of financial institution, which means that uniform reporting may be unlikely.

Transparency: and now you don’t  …   

SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY. (a) IN GENERAL.—Not later than 7 days after the date on which the Board exercises its authority under the third paragraph of section 13 of the Federal Reserve Act
16 (12 U.S.C. 343; relating to discounts for individuals, partnerships, and corporations) the Board shall provide to the Committee on Banking, Housing, and Urban Affairs of  the Senate and the Committee on Financial Services of the House of Representatives a report which includes— (1) the justification for exercising the authority; and (2) the specific terms of the actions of the Board, including the size and duration of the lending, available information concerning the value of any collateral held with respect to such a loan, the recipient of warrants or any other potential equity in
exchange for the loan, and any expected cost to the taxpayers for such exercise. (b) PERIODIC UPDATES.—The Board shall provide updates to the Committees specified in subsection (a) not less frequently than once every 60 days while the subject loan is outstanding, including—
8 (1) the status of the loan; (2) the value of the collateral held by the Federal reserve bank which initiated the loan; and (3) the projected cost to the taxpayers of the loan. (c) CONFIDENTIALITY.— The information submitted to the Congress under this section may be kept confidential, upon the written request of the Chairman of the Board, in which case it shall made available only to the Chairpersons and Ranking Members of the Committees described in subsection (a).

On first reading, it appears that the Committees will be getting the same type of information as that provided to the public. But notice that this section deals with lending, not purchases. And it allows the Chairman of the Board to classify the information as being confidential; although there does not appear to be any criteria in this legislation for making such a classification. This appears to be an interesting dilemma: purchases may require full public disclosure while loans may not require full public disclosure . This appears to be in-line with Federal Reserve Policy of not identifying the borrowers of those multi-billion dollar loans collateralized with toxic paper.

Purchase or insure?

Consider the fact that the legislation authorizes both the purchase of toxic assets and a guarantee of payment regarding certain asset class payments. My question, does the outstanding amount of the guaranteed amount impact the $700 BILLION allocation or will this be similar in nature to one of those “off-balance sheet” accounts used to hide risk from the regulators, investors, public and counterparties?

SEC. 101. PURCHASES OF TROUBLED ASSETS.

The Secretary is authorized to establish a troubled asset relief program (or ‘‘TARP’’) to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as
are determined by the Secretary, and in accordance
with this Act and the policies and procedures developed and published by the Secretary.
SEC. 102. INSURANCE OF TROUBLED ASSETS. If the Secretary establishes the program authorized under section 101, then the Secretary shall establish a program to guarantee troubled assets originated or issued prior to March 14, 2008, including such mortgage-backed securities. (2) GUARANTEES.—In establishing any program under this subsection, the Secretary may develop guarantees of troubled assets and the associated premiums for such guarantees. Such guarantees and premiums may be determined by category or class of the troubled assets to be guaranteed. (3) EXTENT OF GUARANTEE.—Upon request of
a financial institution, the Secretary may guarantee the timely payment of principal of, and interest on, troubled assets in amounts not to exceed 100 per cent of such payments. Such guarantee may be on such terms and conditions as are determined by the Secretary, provided that such terms and conditions are consistent with the purposes of this Act.

Judicial Review …

SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.  (a) JUDICIAL REVIEW.— (1) STANDARD.—Actions by the Secretary pursuant to the authority of this Act shall be subject to chapter 7 of title 5, United States Code, including that such final actions shall be held unlawful and set aside if found to be arbitrary, capricious, an abuse of discretion, or not in accordance with law. (2) LIMITATIONS ON EQUITABLE RELIEF.— (A) INJUNCTION.—No injunction or other form of equitable relief shall be issued against  the Secretary for actions pursuant to section 101, 102, 106, and 109, other than to remedy a violation of the Constitution.

You need read no further, the Secretary will have a legion of lawyers to swear that his actions were appropriate, necessary and constitutional based on the “nuanced” reading and interpretation of the existing statute and case law – as modified by existing precedent. In others words, don’t bother coming after me; except in the media.

Further analysis if fruitless …

It makes no sense to continue the analysis of each and every provision as we are unsure, as of this moment, whether or not the legislation may be modified by the Republicans or changed due to public concerns about the provisions. There are enough loopholes to hide the State of Alaska in this legislation – either by commission or omission and like all legislation be subject to great and small unintended consequences.

I apologize for my cynicism …

Based on human nature and the past actions of politicians, I know that there will be problems with this legislation. There may even be prosecutions. But in the final analysis, as with most bills, the taxpayers will make a few individuals big-time rich and lots of executives and lawyers happy to be able to afford to live like we would like to live.

-- steve 

Quote of the Day: “The easiest thing to find is fault.” –Anonymous

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius

Reference Links:  Read it for yourself … 

Emergency Economic Stabilization Act of 2008

For those with a strong stomach for poli-speak, here are the raw links to various democrat work products which have been temporarily frozen and are awaiting Republican Support.


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


Obama: Protecting America the Socialist/Communist Way?

If there is any doubt that radical socialists and communists have infiltrated the far-left and supported policies which will weaken America’s military and further destroy the now-fragile economy, one need only to look at their plans for defending America against an increasingly leftist world.

In Obama’s own words …

Sounds like the old recycled democrat line from Dukakis and McGovern …

What Obama does not understand …

We are facing enemies who ONLY respect strength and the resolve to use military force if necessary. They laugh at diplomacy that accepts the words of a lying Kim Jong Il as he takes our money and food and does what he pleases with his nuclear development. This is the Madeleine Korbel Albright (born Marie Jana Korbelová), Bill Clinton’s Secretary of State’s approach to diplomacy.

Many a true word is spoken in jest …

Sometimes laughing at the lefties reveals great truths …

See David Zucker’s “An American Carol”  about “an anti-American filmmaker who's out to abolish the July Fourth holiday is visited by three ghosts who try to change his perception of the country.”

There is ONLY one alternative to increasing socialism and the far left attack on America …

 John McCain

Don’t HOPE for a BETTER AMERICA … VOTE FOR ONE!

McCain-Palin

Don’t HOPE for a BETTER AMERICA … VOTE FOR ONE!


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


Democrats get cute: position their power play as prudent protection for "the people" ...

The House democrats have three major fears:

One, even though they have the parliamentary power to pass the bailout bill on their own, without requiring Republican votes, they are afraid to act unilaterally and thus demonstrate their leadership. They recognize that the devil is in the details and that should something go wrong, it is likely to become a campaign issue in the next election cycle.

Two, they are afraid that the current Bush Administration will spend all of the allocated money prior to a potential  Administration shift on January 20, 2009 and that the democrats would have waning influence over who gets the money and the campaign funds that are sure to flow from lobbyists seeking to grab a larger chunk of change for their clients.

And three, they are deathly afraid of what the current Administration may do to influence the current Presidential election as they prepare to dole out the funds.

According to preliminary reports, said to originate from House Speaker Pelosi’s office …

Final details will not be formally released then until the legislation is formally drafted. But a number of hints about what may be included have been dropped to the media.

Disbursement:  While the $700 billion amount is fully authorized, the legislation will call for the money to be disbursed in phases to preserve Congressional control and oversight. Code words to insuring that the democrats get their fair share of the spoils and collateral benefits such as campaign donations from lobbyists and others who might be seeking bailout funds. Preliminary details indicate that the first authorization for $350 billion will be made available to the Treasury department almost immediately. The second half would be contingent upon notification by the Treasury and the approval of Congress which can be no later than 15 days after the request. The form of the request is said to be a joint resolution which is subject to debate and the necessity of a two-thirds majority vote in both the House and the Senate. The resulting legislation would then be sent to the President for his signature. Of course, the President retails his veto rights under this scenario. Thus, the democrats insure their control over at least half the money and their ability to keep the campaign money flowing to the democrats.

Independent Authority: Treasury Secretary Paulson’s request for absolute authority without the possibility of judicial review and/or other interference may be diluted by legislation which may require greater oversight of Paulson’s activities and some increase in transaction transparency, including the potential requirement for disclosure via an Internet reporting structure.

Unfortunately, transparency in financial matters is often further obscured by providing funding to financial institutions without showing detailed information. Only aggregate details may be displayed. There is also the problem of accidently influencing investor opinions by the granting or withholding of toxic paper purchases or their timing. This is definitely a minefield to be negotiated.

More Bureaucracy: After all, who would permit such a large amount of money to be spent without enlarging, in some way, the bureaucratic influence over the disbursement of funds. It is anticipated that a new oversight board may be created. It is said to be bi-partisan in nature and that the GAO (Government Accountability Office) and an independent inspector general may be attached to the new board to monitor fund disbursements and reporting requirements. I wonder if anyone plans to track the campaign contributions to legislators and match them to timelines developed around fund disbursal?

Feel-good provisions: If nothing else, the democrats love to play the class warfare card and thus will be writing in socialistic-style provisions to limit executive pay and golden parachutes for executive’s whose companies receive bailout funds. Again the devil is in the details, as the democrats have indicated that they want to set aside existing legal contracts and agreements and make some of the provisions of this legislation retroactive. It is unknown if the issue can be sidestepped by transferring the toxic securities to a subsidiary which would receive the funds thus shielding executives from the effects of this type of provision. Considering that the democrat party is the party of lawyers, look for the “lawyers full employment opportunity act” as companies seek counsel to protect their executives and to “prepare” fund requests.

Equity Interests: It is likely that the government will want a piece of the action, possibly through non-voting warrants that could be exercised and the stock sold to provide some measure of public payback for the use of the funds.

Workout Provisions: It is likely that the government will be encouraged to seek a beneficial workout in favor of distressed borrowers that still have enough income to service the loan at the original teaser rate. Most attempts to mitigate foreclosures involve resetting the loan at lower rates with longer maturities to compensate for the reduced rate. As for those financial institutions holding second or third mortgages, or have attached a HELOC (Home Equity Line of Credit), they will still have to book the full loss as their will be nothing left after the first mortgage is modified.

My take …

The original Federal Reserve liquidity injection model was not a long-term solution.  Apparently based upon their statutory authority, the Federal Reserve provided loans to financial institutions via an auction mechanism which required firms to bid for funds availability. The subsequent loans were collateralized with the a firms assets which could include the toxic paper. Under this scenario, the firms would receive needed capital and could work out their own problems. However, the Federal Reserve’s liquidity injections were short term semi-solutions, 28-day, 35-day and 84-day loans, which did little to resolve the matter of the firm’s balance sheet – but temporarily staved off the institution’s legal obligation to report their true and correct financial position using GAAP (Generally Accepted Accounting Principles) -- which might have led to adverse consequences such as having to meet additional core capital requirements or be ruled to be unsound or insolvent. Therefore, the uncertainty over a financial institution’s balance sheet remained and lending activities and counterparty transactions continued to be imperiled.

According to my calculations, the Fed has had 21 announced auctions with a face value of approximately $1.085 TRILLION dollars. (2 @ 20 BILLION, 2 @ 25 BILLION, 4 @ 30 BILLION, 4 @ 50 BILLION, 9 @ 75 BILLION). Since the majority of these loans are short term and the Federal Reserve does not release the names of the bidders, it is unknown how many of these loans were simply roll-overs and how much total interest was received by the Federal Reserve (did they deduct the interest from the loan proceeds like all good bankers?) In addition, it may be unknown if the Federal Reserve plans to continue this temporary financial support on top of the bailout funds disbursement and whether or not any of the financial institutions using these relatively costly loans will be among the first to be bailed out. Considering that the Federal Reserve is a private institution owned by its member banks, the transparency regarding these operations may be withheld.

I strongly believe that $700 BILLION is a number generated by legislative consultants as the spin-tested number most likely to insure public support. Large enough to be serious, small enough to allow for the legislators to push it forward with minimal public opposition. I believe the true and correct number is somewhere between $1.2 and 3.0 TRILLION dollars when everything is, if ever, finally tallied. It is also believed that the Treasury and the Federal Reserve will continue to make money available to financial institutions outside of this bailout plan and that there will be subsequent bills to enlarge the amount and scope of any passed legislation. Based on previous Congressional actions, this is a pretty safe bet.

Example:

“The US Senate Saturday approved 25 billion dollars in loan guarantees for the financially strapped US auto industry, intended to spark a wave of automotive innovation.”

“The loan guarantees were included in a continuing resolution that included funding for the US government and the wars in Iraq and Afghanistan.”  <Source>

I guess, the bailout was not the only thing being discussed over the weekend. Amazing, when it comes to real money and political power, our legislators have the initiative to work whatever hours it takes – in spite of their normally relaxed workday schedules, frequent absences and generous holiday provisions. Just wondering: why are we paying Senators Obama, McCain, Biden, Clinton and others while they campaign for office. Shouldn’t they be refunding that money to the Treasury. (Yeah – Right!)

Bottom line: no guarantees!

In light of alternatives, it is not so much that additional funds are actually required, but the entire purpose of this legislative exercise is simply to shore up the balance sheets of financial institutions which would be required to report large losses, possibly threatening their soundness and solvency, should these toxic securities be  subject to current “mark-to-market” requirements.

It should be said noted that nothing has been said about suspending the “mark-to-market” requirement or the repatriation of transactions from off-balance sheet accounts. Two accounting rules which are at the root of this financial crisis.

Whatever the final legislation may contain, there is no guarantee that this maneuver will succeed as counterparty risk is something that each institution must judge for themselves -- relying on an accurate and complete balance sheets of financial institutions. Considering that many of these institutions have off-balance sheet transactions which have not been repatriated to the parent’s balance sheet, full disclosure and transparency may be much harder to achieve.  And given the sorry state of large public accountancy firms in producing accurate audit data, there is also another degree of uncertainty introduced in the process.

Perhaps, along with curtailing executive bonuses and pursuing claw-backs of previously disbursed funds, we should also include those law and accounting firms who sanctioned this crisis by providing opinion letters and accounting trickery to present

Well, it is now a matter of waiting and watching to see what the democrats are putting in the draft legislation and whether or not the Republicans will accept the plan as written.
-- steve

Quote of the Day: “If misery loves company, misery has company enough.” --Henry David Thoreau

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


Bailout: Democrats trying to commandeer negotiations to push their own program (Updated)

UPDATE: 09-28-08 A DEAL IS STRUCK: MAYBE?

According to the Associated Press ...

"Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession. House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper."

"'We've still got more to do to finalize it, but I think we're there,' said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol."

"'We worked out everything,' said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks. Congressional leaders hope to have the House vote on the measure Monday. A Senate vote would come later."

According to Politico.com ...

"In a sign that negotiations were growing serious earlier in the evening,  a Pelosi aide  collected BlackBerrys from the staffers meeting in her office so that no details would leak out."

Even Pelosi's people seem to recognize that fellow democrats cannot always be trusted with high-level financial news and was probably wise to prevent new which will greatly impact the markets from prematurely leaking. The American people should not find it a major surprise that many large players may have insider knowledge which can be used to create their own profitable opportunities. Perhaps not so blantant as buying a distressed stock before the issuance of good news, but by structuring a deal or covering a short position that remains open. Self-interest abounds in Washington and very few fear that the SEC will do a "Martha Stewart" unless they are seeking further media attention for their agency.

The devil behind closed doors ...

As with everything done behind closed doors and on an expedited basis, one must consider that the devil is in the details. Especially the details which cede a great deal of power to a number of individuals who are above the law and not subject to legal action for any malfeasance or wrongdoing. One can only imagine, at this early stage of the game, how a government which has made itself almost unauditable (by design) is going to handle this amount of money without full and complete transparency. We will watch for a written bill to appear soon -- hopefully with enough time for public comment and our legislators and elected officials to actually read the legislation before signing it into law.

Original Blog Entry ...

Democrats in front of the camera …

It is approximately 11:30 pm Saturday night and the smiling self-congratulatory face of House Speaker Nancy Pelosi (D-CA) is speaking before the assembled cameras – assuring everybody that a deal on the bailout is near and that the democrats (as well as others) have been working diligently overtime to develop a bailout program that will pass both the smell test and receive ratification by both sides of the aisle. Standing with Pelosi were congressional leaders including Senate President Harry Reid (D-NV) and the omni-present media-whore Chuck Schumer (D-NY).

According to the Wall Street Journal

“Lawmakers and staff reconvened their meeting around 7:30 p.m. EDT in the offices of House Speaker Nancy Pelosi (D., Calif.), hopeful they could broker a deal on the much anticipated but exceedingly difficult-to-negotiate legislation that would have the federal government buy up billions of dollars of soured assets.”

" ‘We've had Warren Buffett on the phone tonight, other experts that we've been consulting,’ Sen. Kent Conrad (D., N.D.) told reporters as he walked through the U.S. Capitol. He declined to identify other people with whom lawmakers have consulted.”

“Senate Majority Leader Harry Reid (D., Nev.), in an appearance on the Senate floor earlier Saturday, said there are only a ‘handful of issues still lingering’ for lawmakers to finalize. He said his goal was for the Congress and the Bush administration to at the very least release an outline of the bailout plan before Asian markets open Sunday evening.”

Gee … would that be the same Warren Buffett who, acting in his own self-interest, invested $5 BILLION dollars in Goldman Sachs at a 10% perpetual interest rate and who would surely benefit from any legislation which directly benefits Goldman Sachs? Who are the others who were consulted and do they have a vested interest in the outcome. As with the democrats and special interests, you can be there will be some form of self-dealing in their version of the legislation.

Pinocchio and the plan …

Like Pinocchio’s nose which grew with each lie that the wooden puppet told, the democrat version of the bailout plan has grown from a three-page outline to hundreds of pages of draft proposals.

Truth-be-told, the House democrats can pass their plan at any time without an requirement for additional Republican votes. But they are scared of the potential repercussions should the plan be bogged down or, heaven forbid, fail to mitigate the liquidity crisis. The need fellow Republican legislators to provide cover for their cowardly inability to take action on their own. Perhaps it is because they know that any plan will be subject to follow-on legislation and the usual governmental mismanagement. They need bi-partisan support to protect their collective political asses.

It wouldn’t be a democrat plan without additional taxes …

According to Reuters

“U.S. Democrats seek Wall Street tax in bailout plan”

“Democrats in the U.S. House of Representatives are pushing for a new Wall Street tax that would cover the potential costs of a $700 billion bailout being negotiated by Congress and the Bush administration.”

“U.S. House Speaker Nancy Pelosi, speaking to reporters after a meeting with fellow Democrats, said the fee could be assessed after five years if the non-partisan Congressional Budget Office determined taxpayers had lost money in the bailout.”

" ‘If after five years ... the CBO decides that the American taxpayer has lost money in this, then there would be a fee on financial institutions,’ Pelosi said, adding that she hoped the provision could be part of a final bailout deal.”

“Pelosi said that the Secretary of the Treasury could determine how to assess the fee.”

Like most democrats, she believes the American public is stupid and their concerns can be allayed by empty promises of punishing Wall Street for any losses that may accrue when the final numbers are tabulated.

This is sheer and utter nonsense.

One, nobody currently knows what Administration will be in power in five years or that subsequent legislation will not modify any agreement reached as part of the current bailout bill.

Two, Wall Street firms and other financial institutions do not pay taxes and penalties – they are not people, they are artificial constructs of law that simply pass all incurred costs and charges on to their clients and shareholders in the form of increased fees and reduced yields on investor monies.

And three, the fees and other charges will inure to the benefit of the United States Treasury and will serve as yet another source of revenue to offset the profligate spending of Congress or the reduction of the national debt. In either case, this is a tax on the already burdened American taxpayer. 

Consider, for a moment, what Pelosi and her fellow democrats are saying.

Are they planning to calculate the interest costs on $700 BILLION ($1.2 TRILLION by my calculations) for the amount of time it is tied up in toxic securities and then deduct the amount of the good securities which have been sold to special interests at sweetheart pricing?

Will this plan cover the BILLIONS already loaned to various financial institutions by the Federal Reserve and the additional BILLIONS to the automotive and airline industries?

And why should this provision not be considered as just another tax on middle America to help pay for the excesses of a few.

In five years, the amount will be come incalculable by a government who cannot even audit most of their financial systems and which has lost BILLIONS of dollars in so-called accounting errors.

Waiting for the Republican side of the story …

I am willing to wait and see what the final bill looks like, but I am almost positive that it will be one crafted in secret, given to legislators with little time to read the bill, much less debate its provisions on the floor of Congress as is the normal custom for spending bills. I have little faith that the conference committee that reconciles the difference between the House version of the bill and the Senate version of the bill will not be tempted to insert additional compromise verbiage before the bill is sent to the President for his signature.

This still stinks …

The speed at which this bill is being hustled through the legislative process and the breathless pronouncements of elected officials in media releases – makes me wonder if this is an artificial emergency designed to panic the public into accepting a deal that will benefit only the special interests and represent yet another attempt to plunder the United States Treasury – and by extension, our pockets. 

And what I did not hear is any word of claw-backs of bonuses awarded to various and sundry executives based on cooked books and the knowing sale of toxic paper. What I did not hear was a plan for the nationalized GSEs (Government Sponsored Entities) Fannie Mae and Freddie Mac which could require additional BILLIONS of dollars to resolve their precarious position.

And what I did not hear is the complete proposal, presented in bill form, for all Americans to see.

All I did see were some self-congratulatory democrat politicians that were seeking media exposure to convince the public that they have the solution we need to resolve the current financial crisis. Harry Reid’s comment about not knowing what to do, notwithstanding.

What can YOU do?

Observe your legislators carefully and watch how they will attempt to manipulate the situation for their political advantage.

Decide for yourself if this matter is that urgent that it be resolved over long nights and weekends when other serious business has been put on hold so Congress can adjourn for vacation or campaigning.

Know that the public will be screwed – and that it is only a question of how much money will be transferred from the public’s pockets to those of Congressional members and their friends.

-- steve  Quote of the day: “If you would be a real seeker after truth, it is necessary that at least once in your life you doubt, as far as possible, all things.” -- Rene Descartes

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius

Reference Links:

U.S. Democrats seek Wall Street tax in bailout plan| Reuters.com

Bailout Negotiations Enter Evening Session|Wall Street Journal

Warren Buffett’s Great Goldman Sachs deal|Fox News


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


Obama: If his surrogates are any example of his future nominees and appointments, there is a problem brewing

Obama supporters threaten free speech …

It took a press release by Missouri Governor, Matt Blunt, to set the record straight on the Obama camp’s threat to use legal action to silence critics.

A high ranking Senator, Clair McCaskill, and two public officials, identified by their official titles, have participated in this threat to the curtailment of political speech and a potential conspiracy to violate the Constitution’s First Amendment rights to free and unfettered political speech.

The Governor’s press release …

Gov. Blunt Statement on Obama Campaign’s Abusive Use of Missouri Law Enforcement

JEFFERSON CITY - Gov. Matt Blunt today issued the following statement on news reports that have exposed plans by U.S. Senator Barack Obama to use Missouri law enforcement to threaten and intimidate his critics.

St. Louis County Circuit Attorney Bob McCulloch, St. Louis City Circuit Attorney Jennifer Joyce, Jefferson County Sheriff Glenn Boyer, and Obama and the leader of his Missouri campaign Senator Claire McCaskill have attached the stench of police state tactics to the Obama-Biden campaign.

“What Senator Obama and his helpers are doing is scandalous beyond words, the party that claims to be the party of Thomas Jefferson is abusing the justice system and offices of public trust to silence political criticism with threats of prosecution and criminal punishment.

“This abuse of the law for intimidation insults the most sacred principles and ideals of Jefferson. I can think of nothing more offensive to Jefferson’s thinking than using the power of the state to deprive Americans of their civil rights. The only conceivable purpose of Messrs. McCulloch, Obama and the others is to frighten people away from expressing themselves, to chill free and open debate, to suppress support and donations to conservative organizations targeted by this anti-civil rights, to strangle criticism of Mr. Obama, to suppress ads about his support of higher taxes, and to choke out criticism on television, radio, the Internet, blogs, e-mail and daily conversation about the election.

“Barack Obama needs to grow up. Leftist blogs and others in the press constantly say false things about me and my family. Usually, we ignore false and scurrilous accusations because the purveyors have no credibility. When necessary, we refute them. Enlisting Missouri law enforcement to intimidate people and kill free debate is reminiscent of the Sedition Acts - not a free society.”  <Source>

Protecting the people and the system …

Although Governor Blunt is a Republican with a distinguished service record, he should be saluted for not allowing elected and/or appointed officials in his state to threaten the free speech rights of citizens by setting themselves up to decide if someone needs to be prosecuted for making a materially false statement during a political campaign. Under this premise, all political parties and politicians would become liable to the incumbent Administration which represents a clear and present danger to our Constitutionally-granted liberties.

Removed from office …

St. Louis County Circuit Attorney Bob McCulloch, St. Louis City Circuit Attorney Jennifer Joyce and Jefferson County Sheriff Glenn Boyer should all be removed from office and fired for misusing their official positions for political purposes. Until these hyper-partisan officials are removed from office, one can never be sure that any particular prosecution isn’t being undertaken for pure political purposes.

The far-left liberal democrat way …

In many ways, the above attempt to silence critics is merely representative of how far-left democrats behave in society. Political dissent within schools, colleges and universities is often strongly discouraged; with both students, faculties and staff being pressured to present a single far-left liberal democrat, if not socialistic, viewpoint. Students are encouraged to go along to get along if they want to receive  decent grades in an extremely competitive environment.

We continue to hear about neo-cons, but what about the neo-socialists?

The neo-socialists have infiltrated our public institutions to the extent that one never knows if one might be subject to outright discrimination based on one’s constitutionally-guaranteed political beliefs.

Just as it was well-known in the Clinton Administration that President Clinton and his co-captain, Hillary, made it an official policy to rewards their friends and punish their enemies. Often up to the line of criminality if any of the investigations are to be believed.

Adverse outcomes?

It is now time to consider just what an Obama Administration may bring besides higher taxes to support a larger government with ever-increasing power to disrupt American lives. Perhaps, to the point of institutionalizing the punishment of specially-designated “political state enemies.” After all, wasn’t it Obama that wanted to form a civilian defense force with all of the power and capabilities of the military? Since we already have a National Guard in each state that can be used for national emergencies at the direction of the president of the United States, one wonders exactly what this military-like force’s purpose might ultimately be?

Never again …

We have seen a tremendous amount of power concentrated in the Department of Homeland Defense – a huge bureaucracy which has grown increasing unable to perform its mission – along with the increasing reservations of Presidential Power under the Bush Administration. We, the people, need to insure that the next Administration will not unduly interfere with the political process or continue to corrupt the Administration’s agencies as was done in the previous two administrations.

The true test …

The true test: will Barack Obama openly and clearly disavow these actions to curtail free speech and openly and clearly condemn all of the participants in this shameful episode.

Or will Barack Obama do what he did with those racists, anti-Americans and unrepentant domestic terrorists – condemn the act, but not the despicable people who committed the act?

THIS IS A TRUE TEST OF OBAMA’S CHARACTER AND FITNESS TO BECOME THE PRESIDENT OF THE UNITED STATES.

For what it is worth …

It is my personal opinion that Obama has no balls, no courage and offers no change. He is a typical Chicago-style machine politicians with a batch of corrupt acquaintances, advisors and mentors with an ultra far-left socialistic/democrat agenda that will be extremely damaging to the people of the United States.

-- steve

What can YOU do?

Condemn those who would deny you your constitutional rights.

Do not vote for any candidate or current politician who is willing to subvert the safety, security, sovereignty and economic strength of the United States or limit an individual's right of self-defense for their personal philosophy, power, prestige or profits.

-- steve

Quote of the day: “The nice thing about being a celebrity is that when you bore people, they think it's their fault.” -- Henry Kissinger

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


HOW DEMOCRATS DO BUSINESS... INSIDER INFORMATION?

Amazing how a little mention in the New York Post’s serious gossip feature Page Six can highlight how Senators, and in particular, Chuck Schumer do the people’s business?

September 27, 2008 --  Page Six Sightings

“SEN. Chuck Schumer and taxi tycoon Andrew Murstein traipsing up four flights of stairs at '21' to meet Mario Cuomo and several other US senators for a briefing on the federal bailout plan . . . "

Is this how inside information is conveyed to “friends of friends” who may potentially use the information for their own purposes: power, prestige or profit?

Considering that media-mad Schumer single-handedly brought down IndyMac bank with the media disclosure of a leaked letter to IndyMac ’s regulators, perhaps someone should investigate whether or not any of the meeting participants was in a position to receive or use “insider” information.

Perhaps someone should notify Christopher Cox at the Securities and Exchange Commission …


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


Bailout: For your amusement -- one of the dumbest Senators parrots the democrat talking points ...

Carried as “breaking news,” here are comments by one of the dumbest Senators in Congress which are designed to reiterate democrat talking points and characterize Senator McCain’s reluctance to continue the debate with the bailout bill pending.

Barbara Boxer, in her own worthless words …

 

Barbara Boxer (D-CA): “I think it was a little political theater to change the debate. And let me tell you why John McCain wants to change the debate. Of all the people who have been in the forefront of deregulation, which is the cause of this problem, deregulation, is John McCain. It started with the Keating Five when he went in there and tried to press regulators not to go after a savings and loan with Charles Keating. We know about that. And it continued on  through his whole career in terms of leading the charge with Phil Gramm for deregulation. He doesn’t want people to know that. He doesn’t want you to talk about it. Isn’t it better to talk about whether or not their will be a debate.” <Source>

Boxer, arguably the dumbest member of the Senate, not only distorts the truth, but she is totally clueless when it comes to the real world.

First, McCain was one of the Senators who was involved in the Keating Five Scandal. The counsel to the hearing suggested that Republican Senator McCain be released as his role was minimal and their was no clear evidence that he acted improperly. The democrats did not want this to be a democrat-only scandal and refused to release him from the hearing.

“After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings. Senators John Glenn and John McCain were cleared of having acted improperly but were criticized for having exercised "poor judgment".

“All five of the senators involved served out their terms. Only Glenn and McCain ran for re-election, and they were both re-elected.”

So obviously Boxer does not know what she is talking about and is trying to smear a fellow Senator with non-existent facts.

And second, it was not deregulation which was the cause of this problems. There were regulators aplenty (federal regulators such as the FDIC, OCC, FED, OTS, NCUA, SEC as well as state regulators), many of whom did not adequately perform their tasks.

The real cause of the problem leads back to the democrats who, for political purposes, demanded that the democrat creations Fannie Mae and Freddie Mac purchase mortgage loans from people who could not qualify for traditional mortgages due to problems with their past credit history or lack of steady employment. In addition, a democrat-led Congress continued to push banks into making more loans to racial and ethnic minorities – again with relaxed lending standards.  When thousands of these "relaxed" or "no qualification" loans were given to people who could not afford their homes, they either re-financed or were foreclosed. When property values dropped, they could not re-finance, so thousands faced foreclosure -- driving the real estate market into a downward spiral which precipitated the humungeous losses among financial institutions which used borrowed funds to leverage their profits on this toxic paper. Unfortunately, leveraged investments that rise metorically in good times, fall catestrophically in bad times. Thus many financial institutions that held this bad paper became technically insolvent or "unsound" and needed to be bailed out of their predicament lest the contagion spread to the entire economy.

That is not to say that certain lenders and Wall Street Wizards did not capitalize on the situation and walk-away with multi-million dollar bonuses. It says that Barbara Boxer is out of touch with the reality of the current financial crisis – and stupidly continues to spew forth democrat talking points to people who do not seem willing to challenge her on her facts and assumptions.

The real story …

Pin the tail on the donkey or you bet your sweet ass…

DemDonkey1_thumb1

1 Barack Obama 11 Jimmy Carter
2 Reverend Wright 12 Bill Clinton
3 Tony Rezko 13 Hillary Clinton
4 Minister Farrakahn 14 Henry Cisneros
5 Reverend Phleger 15 Franklin Raines
6 Chuck Schumer 16 Jamie Gorelick
7 Barbara Boxer 17 James Johnson
8 Charlie Rangel 18 John Murtha
9 Nancy Pelosi 19
10 Harry Reid 20

Please feel free to suggest additional names or comment.

-- steve

Quote of the Day: “Confidence and enthusiasm are the key to winning elections; experience is the key to winning wars.” -- steve

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS


DEBATE RESULTS: THE PUBLIC LOSES

Presented in a controlled environment were two fairly polished politicians: one young and relatively inexperienced and the other older and apparently wiser.

  • Barack was light on details. Flat affect and lack of engagement and apparent lack of sincerity. Good appearance.
  • McCain was unusually polite and restrained. A liitle jittery.

What was said …

  • Barack: nothing of substance
  • McCain: nothing of substance

Bottom line …

  • Staged Beauty Pageant
  • No memorable sound bytes

Once again, each and every spin merchant and media pundit will have their own spin and continue to analyze the blandness of the debate into obscurity.

NEXT …


“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell

“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar

“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS