Murdering America

By Alan Caruba

We are all witnesses to the crime; the deliberate murder of the United States of America.

In just under a year and a half, the White House in collusion with the Democrats in Congress has conspired not to “save” America from a financial crisis they created, but to kill America through a series of multi-billion dollar “bailouts” that have two things in common. (1) They did not work and (2) they have created levels of national debt beyond anything in the entire previous history of the nation.

Seen in this light, they are a brilliant game plan for destroying what was once the greatest economy in the world. It was based entirely on capitalist principles of free market competition, constant innovation, and entrepreneurial enterprise. Tied now as we are to the economies of other nations, there’s not much good news of late.

The Obama administration has imposed the takeover of one sixth of the nation’s economy through its so-called health care “reform” and there are already revelations that it will not save money, but cost much more. It will deprive Americans of the right to make decisions with their physicians regarding all manner of treatment, some of which will literally determine life or death. It will reduce options for medical care as physicians, particularly in private practice, close their doors.

Writing in the June issue of Health Care News, John C. Goodman said, “Despite assurances, the Medicaid expansion included in the health care legislation signed by President Barack Obama is not another unfunded mandate foisted on the states, many states will find their budgets bloated with new Medicaid spending.” Goodman is CEO of the National Center for Policy Analysis. It defied credibility that millions could be added to Medicare and Medicaid roles without raising the costs of these programs. In the end, Obamacare was forced upon Americans, the majority of whom opposed it and still do.

Among the priorities of a new Congress, in the event that power passes to the Republican Party, is the repeal of Obamacare.

The new financial “reforms” need to be rolled back as they too place limits on Wall Street that found itself victimized by the fact that Fannie Mae and Freddie Mac, two “government sponsored entities” are directly responsible for the housing bubble. It is insane that the federal government should hold the majority of mortgage loans. Yet the “reforms” just passed make no mention of either agency!

The Cap-and-Trade Act, renamed a “climate” bill and awaiting a vote in the Senate, would raise the cost of all energy use in the nation and literally destroy the economy. Likewise, the effort of the EPA to regulate carbon dioxide would have the same effect.

Another priority is to take General Motors off life-support for the unions that destroyed it through their salary, healthcare and pension demands. Here again, the federal government has no rational justification for such ownership. The most recent proposed bailout at a cost of $165 billion is yet another bailout for union pensions and this, too, is not a responsibility of American taxpayers.

There was a time in the nation’s history when unions were needed, but now they are largely parasitic, draining the treasuries of the federal and state governments, and no where is this more obvious than in the Service Employees International Union. Obama is so closely allied with SEIU that one wonders why so little attention was paid during the 2008 campaign. This union alone is alleged to have spent as much as $60 million to secure his election.

There are other government worker’s unions such as the teacher’s unions that exert political power in money, campaign manpower, and votes. The teacher’s unions have largely failed their mission to impart the most basic skills, leaving American students behind their counterparts in other nations. Their health and pension benefits, well in excess of the private sector, are a massive drain on the public treasuries of state governments.

There are only two protections left to Americans, the courts and the ballot box. The courts appear to moving far too slowly on the issue of constitutionality regarding Obamacare and, in particular, Barack Obama’s eligibility to be President.

All this demonstrates an astounding lack of power that has always being attributed to Wall Street and to corporations in general. Environmental opponents popularly refer to them as Big Oil, Big Coal, or Big Pharma. They appear to have no power against an aggressively Marxist President, his administration, and a Congress dominated by progressives.

On May 22nd, Rasmussen Reports revealed that 72% of likely voters say they are not confident that Congress knows what it’s doing as regards the economy. There has been little change in this opinion since September 2008.

The voters, however, have demonstrated their power in the election of a Republican as Senator from Massachusetts and two Republican Governors in formerly Blue States. The primaries are demonstrating that the only way to win is to be anti-Obama and the best way to lose is to be an incumbent participating in the destruction of the nation.

The current national state of mind is understandably one of growing fears and it should be in the face of the determined effort to destroy America.

© Alan Caruba, 2010

Obama, the Scourge of the Constitution

By Alan Caruba

Barack Obama taught a University of Chicago Law School course on the U.S. Constitution. In response to inquiries during the campaign, the school released the following statement:

“He was a Lecturer from 1992 to 1996. He was a Senior Lecturer from 1996 to 2004, during which time he taught three courses per year. Senior Lecturers are considered to be members of the Law School faculty and are regarded as professors, although not full-time or tenure-track. The title of Senior Lecturer is distinct from the title of Lecturer, which signifies adjunct status. Like Obama, each of the Law School's Senior Lecturers has high-demand careers in politics or public service, which prevent full-time teaching. Several times during his 12 years as a professor in the Law School, Obama was invited to join the faculty in a full-time tenure-track position, but he declined.”

Presumably, he knows something about the Constitution, but that has not prevented him from ignoring parts of it that he finds inconvenient and undermining others.

Putting aside the controversy over his actual place of birth which would render him ineligible to be President, his latest effort to ignore the Constitution comes in the form of a proposed “financial crisis responsibility fee” to be imposed, according to Fox News, on “roughly 50 firms (that) will be subject to the fees, which will apply only to banks, insurers, and investment houses with assets in excess of $50 billion.”

“Significantly,” noted the Fox article, “the administration will exempt General Motors, Chrysler, Fannie Mae and Freddie Mac from the fees even though most of the current TARP deficit is linked to taxpayer bailouts of these firms.” It is worth noting that General Motors and Chrysler owe $66 billion of the total and the insurance conglomerate, AIG, owes about $70 billion. While the government is, for all intents and purposes, owns GM and Chrysler, the real winner in the bailout bonanza is the United Auto Workers.

I am not a constitutional scholar, but among my friends is an attorney and former judge, Lionel Waxman, who writes one of the liveliest blogs on the Internet, “Flashpoint.” As he noted in a recent post, “I cut Obama no slack on his ignorance of the Constitution. He was a law professor for Pete’s sake. He taught the stuff.”

“Here’s where he runs merrily athwart the Constitution,” said Waxman. “The equal protection clause has been ruled as prohibiting singling out some people for different (treatment) by law than others similarly situated. That’s exactly what he is doing. Article 1, Section 10, rules out issuing writs of attainder.”

Here’s a definition: BILL OF ATTAINDER, legislation, punishment.
1. An act of the legislature by which one or more persons are declared to be attainted, and their property confiscated.
2. The Constitution of the United States declares that no state shall pass any bill of attainder.

Wikipedia notes that, during the Revolutionary War, bills of attainder, and ex post facto acts of confiscation, were passed to a wide extent. The evils resulting from them, in times of more cool reflection, were discovered to have far outweighed any imagined good. As a result, the authors of the Constitution ensured that such writs of attainder could not be issued by the federal government.

Waxman advises me that the prohibition against Bills of Attainder did not bind the States at the time of the Revolution. It was not extended to the States until the Fourteenth Amendment was passed in 1866, whereupon it was held to be one of the privileges and immunities which the States were then bound not to abridge.

What makes the President’s proposal even more outrageous is that the banks he seeks to punish are guilty of nothing more than obeying federal laws that required them to make loans to borrowers that, under normal banking standards, would never have qualified for them. The law is the Community Reinvestment Act and it is one of the primary causes, along with Fannie Mae and Freddie Mac, for the implosion of the housing mortgage market.

Adding to the outrage are the exemptions noted above and the fact that the banks in question have all repaid the TARP money they were literally forced to take!

This President wants to punish banks and other financial institutions for obeying the law! He wants to extract monies from them as a means to reducing the present federal debt, elements of which he voted for. There is no talk whatever of returning the unspent “Stimulus” bill funds to the Treasury towards this end.

Obama is becoming the scourge of the Constitution.

His healthcare “reform” bill, major portions of which no one has seen to date, is unconstitutional on several counts, not the least of which is the way it exempts the entire State of Nebraska or extends special provisions to the State of Florida, thus requiring the other States to unfairly pick up the slack.

This is a President who, through his Attorney General, is extending the protection of the U.S. Constitution to admitted enemy combatants! This is an offense to the 9/11 victims and all Americans past and present for whom the document represents hard won freedoms.

At what point will the ruling party in Congress, the Democrats, begin to resist these attacks on the Constitution? At what point will the Republicans take off the gloves? At what point can we expect the President to cease his attacks upon it?

If ever there were grounds for impeachment, these and other actions by the President are mounting evidence for such an action.

Stop the Bailouts!

By Alan Caruba

I can recall the bailout that Chrysler received in 1979. Jimmy Carter was President and the question of whether the government should save the nation’s third largest automaker was subjected to a lot of debate. In the end, Congress authorized a $1.5 billion loan package. In 1983, Chrysler repaid the loan guaranteed by the U.S. taxpayers.

By contrast, the so-called Stimulus Bill authorized the spending of $787 billion!

The Chrysler bailout was considered an anomaly even though the government has been in the business of making loans to just about anybody and everybody from small business owners to college students for a very long time.

From the G.I. Bill after World War Two to the latest effort to rescue defaulting homeowners from themselves, loans are part of the fabric of how government is seen.
Given the success of government-run entities such as Amtrak or the Postal Service, the notion that the now government-owned GM can recover, let alone pay back those billions, is doubtful.

Based on a liberal interpretation of the Constitution, the Federal Housing Administration was founded in 1934 to insure mortgage loans made by private firms to qualifying homeowners. The U.S. was in the midst of the Great Depression and the FDR administration engaged in every kind of intervention into the economy in an effort to end it.

In hindsight, many historians and economists believe that, had the government done nothing, the Depression would have very likely ended on its own. The general consensus is that all those government programs prolonged the Depression for ten long years until World War Two intervened.

The government really got into the mortgage loan business big-time when it created Fannie Mae and Freddie Mac so that everyone who wanted to own a home could go to a bank or mortgage company that would, in turn, sell the loan to either of these two quasi- government entities. By the time the government was forced to seize their control, they would own or guarantee about half of the United States’ $12 trillion mortgage market.

Recall that in September 2003, Rep. Barney Frank (D-MA) defended the financial soundness of Fannie Mae and Freddie Mac. Backed by the full credit of the nation, mortgage loan rates kept getting lower and lower at the same time banks and mortgage loan firms were being pressured to make loans to minorities and others who, using normal banking standards, would not have received them.

Just how well did that work out? According to a December 31 article on Bloomberg.com, “Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallis on, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.”

Do you think there might have been a connection? “The debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks grew an average of $184 billion annually from 1998 to 2008, helping fuel a bubble that drove home prices up by 107 percent between 2000 and 2006, according to the S&P/Case-Shiller home-price index.”

So, it was the government, not “greedy” bankers and mortgage loan companies that created the scenario that led to the present financial crisis.

If you think that was a bad idea, wait until H.R. 4173 kicks in. The financial reform legislation that passed the House of Representatives in early December and is awaiting a vote in the Senate is the handiwork of Financial Services Committee Chairman, Rep. Barney Frank (D-MA), the same person who told us how sound Fannie Mae and Freddie Mac were.

At 1,279 pages, it is unlikely that anyone in the House read the bill, but we are in a new age of governance where Congressmen and women no longer feel required to read a bill before voting on it.

Republican members of Congress are the exception because, as you may have noticed, not one of them voted for healthcare “reform.” Through bribery and other means, the bill still passed the Senate. A dozen or more states are already seeking exceptions and some governors are threatening to sue to block it.

Columnist David Reilly of Bloomberg.com reports that Rep. Frank’s bill authorizes the Federal Reserve to provide as much as $4 trillion in emergency funding the next time Wall Street crashes.

“This is more than twice what the Fed pumped into markets this time around.” The bill does require that there has to be “a 99 percent likelihood” that all funds and interest will be paid back. It also allows the government to back financial firm’s debts in the next crisis. It is a blank check for the next crisis and a very bad idea.

The Frank bill also prohibits “any incentive-based payment arrangement.” And we all know how well any business functions when you take away any incentives.

In October, the Cato Institute issued a Policy Analysis titled, “Would a Stricter Fed Policy and Financial Regulation Have Averted the Financial Crisis” by Jagadeesh Gokhale and Peter Van Doran.

“Imposing onerous financial regulations will only impede the reconstitution of financial institutions, delay the recovery, and dampen the pace of long-term economic growth.”

You think?

The Cato analysis noted that many of the nation’s prominent economists significantly misread the state of the economy.

“In hindsight,” the Cato authors concluded, “they were all wrong.”

In the first issue of 2010, Business Week’s Bradley Keoun pointed out that, “As the last big banks scrambled to return their bailout funds in mid-December, the President summoned top Wall Street chiefs to the White House, urging them to increase lending to companies and individuals.”

What the President knows or understands about finance could fit neatly into a bug’s ear. In his view, Wall Street is composed of “fat cat bankers.” Not a good attitude if you want them to begin making loans again.

While granting that the TARP funds proved effective in getting credit flowing again, Keoun also noted that “Even when they had the federal funds, banks hunkered down in the face of losses.” They have not been making loans at the previous pace, fueled in part by the housing bubble (see Fannie Mae and Freddie Mac). Indeed, “As capital rises, lending is falling,” noted Keoun.

Ominously, the Business Week reporter concluded that “The only provider of credit is the government.”

The government is not supposed to be in the banking business. What it is authorized to do is “lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.” Towards this end, the government may “borrow money on the credit of the United States.”

That credit is based on the ability of Congress to manage the government in such a way to avoid plunging the nation into levels of debt that will devalue the U.S. dollar and threaten the loss of its rating as a reliable, trusted borrower. The U.S. government must borrow a billion dollars a day just to stay in business.

In May 2009, the President said “We have no money.”

After that he and the Congress returned to the effort of increasing the national debt with a “Stimulus” bill that was pure “pork”, and nutty programs like “Cash for Clunkers.” After that, we were told that jobs had been “saved” in Congressional districts that don’t even exist. The latest insanity is Obamacare that increases the insolvency of Medicare by adding thousands of recipients to its rolls.

The White House and Congress are treating the nation’s wealth as if it were Monopoly money. It’s not. It’s our money.

A Man-Made Financial Disaster

By Alan Caruba

You will recall that, shortly before the end of the 2008 political campaign, the White House announced a threat to the entire financial system and called on Congress to enact emergency spending powers. The Emergency Economic Stabilization Act of 2008 was enacted on October 3, 2008.

Just eighteen days earlier an event occurred that slid under the radar screen of virtually the entire mainstream media. On Thursday, September 15, 2008, at approximately 11 A.M., the Federal Reserve noticed a tremendous draw down of money market accounts in the nation, amounting to $550 billion dollars. It occurred within an hour or two. The money was removed electronically.

It has never been made public which accounts were affected, nor where the withdrawn funds were sent. If we knew those facts, we would know who launched an attack on the United States that has been more devastating than any in our history.

Had the Federal Reserve not closed down the accounts involved it is estimated that by 2 P.M. $5.5 trillion would have been withdrawn and the entire economy of the nation would have collapsed. It would have been followed within a day with the collapse of the world’s economy.

What followed was the sub-prime mortgage loan debacle that can be traced to the government’s intervention into the housing loan marketplace via Fannie Mae and Freddie Mac. They ended up owning fifty percent of all the loans.

Americans were using home ownership as a credit card and government policies were mandating the issuance of bad loans in the name of “social justice.” Home ownership became “a right”, not an aspiration.

Throughout the 1990s, as communities revalued homes, increasing their alleged worth in order to impose higher property taxes, it was only a matter of time before a financial collapse became a reality. Virtually every State was spending beyond its means and increasing property taxes was the preferred choice to make up the difference.

That collapse, however, was initiated by unknown persons at precisely the time Americans were preparing to select a new president. That was not a coincidence.

In the October edition of “Budget & Tax News”, a publication of The Heartland Institute, a non-profit, free market think tank, there was an article by Sandra Fabry, the government affairs manager for Americans for Tax Reform and executive director of the Center for Fiscal accountability, a project of the organization.

The article was titled “61% of National Income Goes to Government.”

“Americans this year had to toil until August 12 to pay for federal, state, and local governments, according to the annual Cost of Government Day report by the Americans for Tax Reform Foundation and Center for Fiscal Accountability.”

“In 2009, the government will consume a whopping 61.34 percent of national income.”

The redistribution of income has reached a point in which 30.36 percent of the money Americans earn is consumed by federal spending. State governments take their percentage as well in income, sales, and other forms of taxation.

It means that Americans worked for 111 days of the year just to pay for the costs of the federal government and federal spending has reached a record 28.5 percent of GDP.

With the passage by the House of the government’s attempted takeover of the nation’s healthcare system and the up-coming cap-and-trade bill, a massive tax on energy use, there is no telling how many more government spending programs, huge redistribution schemes, Americans will be obliged to pay for.

The Obama administration swiftly embarked on an unprecedented spending spree, “bailing out” General Motors and Chrysler, in effect owning AIG, the insurance giant, and giving funds to various banks to “stimulate” loans, i.e. credit, that Americans and their business enterprises depend upon to function.

Peter Schiff, CEO of Euro-Pacific Capital, has long argued that the problems of the American economy were created by excess credit and debt, and that a massive infusion of credit and debt into the economy only exacerbates the problem. He is right.

The “stimulus” has not worked and the billions still unspent by the program should be returned to the American treasury. Taxes should be cut in order to allow Americans to save or spend their own money. Contracts with civil service and teacher’s union should be renegotiated. A vast regulatory revision to remove obstacles to economic growth should be implemented.

Meanwhile the government’s “official” figures say 10.2% of Americans are out of work, but the actual figure is estimated to be closer to 17%. Nothing is being done to facilitate hiring with tax credits and reduced taxation of small businesses, nor are the highest corporate taxes in the world being reduced to encourage domestic investment and growth.

And our present difficulties began on September 15, 2008 in what gives the appearance of a calculated attack that got Barack Obama elected and was immediately followed by all the subsequent efforts to grow the federal government ever larger to make more Americans dependent upon it. The Obama administration has increased the national debt more than all previous presidencies combined.

There is a determined effort under way to undermine the free market capitalist system that made America the greatest economic and military power in the world. Both the White House and the Democrat-controlled Congress are parties to it, but the identities of those who launched that September attack remain hidden.

Editor's Note: To read about the electronic attack, click on
http://www.capitalismgonewild.com/2009/02/electronic-run-on-banks-550-billion.html