First we bailed GM out with $17.5 billion last December...then an additional $6 billion in March.
At that time President Obama said "We cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars. These companies -- and this industry -- must ultimately stand on their own, not as wards of the state."
The United States will accept stock in lieu of the cash the company owes, and Washington -- that is, you, the taxpayer -- will become the owner of 70 percent of the new GM. When might the company stand on its own, to paraphrase Mr. Obama? When would the government exit the stage? The (Washington) Post reports today that administration officials hope to depart within five years, but the truth is that nobody knows when or whether taxpayers would recover their investment. (emphasis added)
Not only that, but the deal made goes against U.S. bankruptcy rules by giving other claimants more stock/money than secured bondholders (see earlier posts). And, the Treasury Department has given GM a list of which dealerships must be closed, without ever disclosing any kind of criteria for which should be closed and which should not (profitability is not the criteria, as the list shows).
Also amazing is that the Executive Branch has engineered this entire thing without Congress, even though something like this would traditionally be handled by Congress.
Assume that there really is "global warming" or some kind of catastrophic climate change (even though the climate has changed many times over the millenia).
Then assume that this climate change is primarily cause by humans and our carbon emissions (even though there is evidence to the contrary on this point).
Even if you agree with those two assumptions, our government is not behaving rationally as it tries to "fix" global warming by forcing Americans to "reduce our carbon emissions." Why?
Because China, India and other developing countries will not impose restrictions on their carbon emissions, and they have high levels of emissions!! So we could cut our emissions to almost zero (and we would all be farming and living in poverty to do so) and it still would not "fix" global warming (in 2006 the U.S. emitted 20% of the world total, with China emitting 21%).
The Administration and its Congressional allies are trying to impose a significant carbon price in the U.S. through something like the Waxman-Markey bill, while entering an international negotiation process in which as much as 60% of global carbon emissions could face little to no carbon price. The likely outcome would dramatically tilt the global economic playing field, harming U.S. workers and firms relative to their counterparts in China and India. At the same time, it would make little progress toward addressing the risk of severe global climate change, as a large portion of global carbon emissions would remain effectively uncapped.
From an American standpoint this seems extremely unwise. It is an incomplete climate change strategy, with a hole about how to deal with China, India, and other large developing nations. (emphasis added)
This is from a very interesting and readable article...check it out.
...the DOJ is currently pursuing litigation against two West Virginia newspapers, who have been operating for decades under a joint operating agreement. The DOJ wants to dissolve the agreement because it is dissatisfied with the editorial quality of one of the papers, the Daily Mail. The Newspaper Association of America, in a court filing, explained why that would be a bad idea:
"The government cannot properly base a claim on its negative evaluation of the Daily Mail's content. Nor could it properly seek a judicial decree that more newspaper editorial and news content be published in Charleston then currently exists. No branch of government in this Nation is entitled to determine the type or volume of the editorial and reportorial content of newspapers.
Editorial quality is in the eye of the beholder. One need only contrast 60 Minutes with Entertainment Tonight to see the subjectivity involved. In the field of newspapers, different publications may take vastly different approaches. The New York Daily News is not the same type of paper as the Miami Herald, the New York Times or USA Today, to arbitrarily pick a few. Which newspaper would the DOJ most want the Daily Mail to resemble and have the Court require?"
And don't think they are stopping at newspapers...The Federal Trade Commission (FTC) is thinking about ways to regulate the credibility of bloggers on the net.
Years ago, my Dad suggested I get a job in the government, because they have rich benefits, short hours, and you can't get fired!! I never took him up on this advice, but you can really see how right he was....
A study in 2005 by the nonpartisan Employee Benefit Research Institute estimated that the average public-sector worker earned 46% more in salary and benefits than comparable private-sector workers. The gap has only continued to grow. For example, state and local worker pay and benefits rose 3.1% in the last year, compared to 1.9% in the private sector, according to the Bureau of Labor Statistics (BLS).
But the real power of the public sector is showing through in this economic crisis. Some five million private-sector workers have lost their jobs in the last year alone, and their unemployment rate is above 9% according to the BLS. By contrast, public-sector employment has grown in virtually every month of the recession, and the jobless rate for government workers is a mere 2.8%. For anyone who thinks such low unemployment numbers are good news, remember that the bulging public sector must be paid for with revenues that most governments don't currently have. (emphasis added)
Remember, we pay for those salaries and benefits.
In addition to having recession-proof jobs and rich benefit plans, the public sector unions yield great political power. For example:
The Obama administration is threatening to rescind billions of dollars in federal stimulus money if Gov. Arnold Schwarzenegger and state lawmakers do not restore wage cuts to unionized home healthcare workers approved in February as part of the budget.
California has a huge budget deficit, and unlike the federal government, cannot print money or issue debt to pay for their deficits. But it looks like they won't be allowed to cut public payrolls either, which will make it nearly impossible to get their deficits under control. Not to mention the philosophical issues with the federal government telling a state how to run their business...
As you may have heard, the president had a meeting Monday with leaders from 6 major health care organizations. After the meeting, the president made the following statement.
These groups are voluntarily coming together to make an unprecedented commitment,” Mr. Obama said. “Over the next 10 years, from 2010 to 2019, they are pledging to cut the rate of growth of national health care spending by 1.5 percentage points each year — an amount that’s equal to over $2 trillion.”
Well, according to the health care folks, that was NOT what they said. They did agree to work to cut the rate of increase in costs, with the target being that eventually the annual rate of increase would be about 1.5%. That's a lot different than what the president said.
To add to the confusion, the director of the White House Office of Health Reform, said “the president misspoke” on at least 2 different occasions. But yesterday, she took that back and said that the president did not misspeak (wonder what the health care execs think of that!)
This is another case of the president saying something that is not correct, but sounds good. As you read the full article, notice the statement about hospitals putting major construction projects on hold, given all the confusion about what is going to happen in the health care arena.
Now there are accusations that Steve Rattner, the head of the Auto Industry Task Force (who is also under scrutiny in a probe of kickback schemes involving NY pensions), threatened to destroy the reputation of an investment bank that owns Chrysler debt if they didn't accept the government's plan for divvying up Chrysler (see earlier posts on the flaws in the government's plan).
Perella Weinberg Partners, Lauria said, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence."
...Lauria said his clients "are mainly fiduciaries for pension plans, college endowments, retirement plans and credit unions who invested in low yield supposedly very secure first lien debt" with Chrysler.
Chrysler announced yesterday that it would file for Chapter 11 bankruptcy. Chrysler and the government were not able to obtain approval of their restructuring plan from some of the senior debt holders.
The principle at stake is the long-standing legal precedent of senior debt holders having first rights to assets of the company that they have lent money to. In the proposed plan, unsecured creditors and union members would jump ahead of the debt holders claims. The debt holder group is divided in it's support of the plan. Those in favor are the large banks (who are receiving TARP and other bailout funds). Those opposed tend to be the smaller hedge funds and private investment firms (which by the way, are investing money for teachers, pension plans retirees and other investors like you and me). Of course, the Obama administration is portraying this group as "speculators who are endangering the future of Chrysler".
Here are the highlights of the plan developed by the Obama administrations auto task force.
The $4 Billion that we lent them so far is wiped out. Instead, US gets 8% equity ownership
Current equity shareholders are wiped out, and will have to contribute $600 million to cover pension obligations
UAW Retiree health care fund is currently owed $10.6 Billion by Chrysler. They will receive a $4.6 Billion promissory note to be paid back (with interest) over the next 13 years. In addition, the UAW gets 55% ownership of the company.
Pension obligations are untouched
Amounts owed to suppliers will be repaid over time, with assistance of TARP funds
Secured/Senior Debtholders would forgive $4.9 Billion of what is owed them. They would end up owning $2 Billion of debt from Chrysler (30 cents on the dollar).
Fiat gets 20% ownership now and 15% more later, in exchange for giving technology to Chrysler. (Editorial comment: what are the odds that they get the 15% later if they do not produce the kind of eco-cars that the US government wants them to make?).
U.S. to provide an additional $8 Billion dollars to assist during the transition.
The Senate voted 51-45 (12 Democrats voted with Republicans) against passage of the amendment sponsored by Senators Durbin (IL) and Schumer (NY). As you may recall, this was part of the "mortgage bailout" plan announced several weeks ago. The cramdown would have allowed bankruptcy judges to rewrite mortgage contracts, reducing the principal that would need to be repaid (I wish I could get one of those!). Opponents argue that this would increase the cost of doing business for lenders (banks), who would pass this along by increasing mortgage interest rates in the future.
Over the past few weeks, Senator Durbin has attempted various legislative maneavers to get this passed. For example, he tried to make it part of a bill that was going to increase funding for FDIC insurance. He assumed that there was no way the Senate would not increase funding. However, he was unable to do that.
Private Property. This is one of the founding principles of Western civilization and capitalism. If you borrow someone's private property, you have to pay it back (It's not optional). GM has borrowed $27 billion from its bondholders. If GM cannot repay these debts on time with interest, then according to all the laws of this country and 1,000 years of common-law tradition, GM's assets are legally transferred from the company's equity investors to the bondholders through bankruptcy. Those are the rules (equity is what is "left over" after all other claims have been satisfied). However this Administration does not seem to want to play by the rules.
The U.S. government is demanding a 50% equity stake in the restructured GM. On what basis, you might ask? True, they have put $15 billion into the company, but only after GM should have filed for bankruptcy. In other words, without the government's "help," the bondholders would have gotten 100% of the new company. Now, even though the bondholders (you, me, our pension plans) are still owed $27 billion (almost twice what the government is owed), they (we) are being asked to accept only 10% of the equity in the new GM. So the government get's 50% and the unions get 39%; while the company's legitimate creditor's receive 10%. How fair is that?
Capitalism doesn't work when debts aren't repaid. Capitalism doesn't work when legitimate creditors are put last in line – behind the government and the union. What impact do you think this will have on lenders? Would you be willing to lend money to a company, knowing that the government may come in, disregard your rightful claims and steal your money?
More troubling news about the TARP bailout (in addition to the fraud investigations and the threats made by the government to banks):
On April 21, the Special Inspector General for the Troubled Asset Relief Program Act of 2009--"SIGTARP"--submitted his quarterly report to Congress on his office's activities in relation to the TARP program. The report is a disquieting document that should be read by every American--certainly be every taxpayer.
The Inspector General's report documents the stunning and at least partly illegal expansion of TARP from the $700 billion originally allocated by Congress to what is now a $3 trillion complex of programs. This chart shows the various programs that are now included within SIGTARP's oversight, and how they have expanded from the initial $700 billion. Note that some of the programs are still incipient; $3 trillion is by no means a final number.
It is also distressing that the Treasury is refusing to tell taxpayers how this money is being spent (this is from the SIGTARP report):
In light of the fact that the American taxpayer has been asked to fund this extraordinary effort to stabilize the financial system, it is not unreasonable that the public be told how those funds have been used by TARP recipients. Treasury is now conducting regular surveys of the banks' lending activities; however, with the exception of Citigroup and Bank of America, Treasury has refused to seek further details on TARP recipients' use of funds.
A concern of many Americans has been the expansion of power by the federal government. This expansion grew under the Bush Administration, and has accelerated under the Obama Administration.
One idea being floated is a set of amendments to the U.S. Constitution that would clarify and define the power of the federal government vs. the power of the states vs. the rights of the individual.
Here are several links with information about this proposal:
The process for amending the Constitution is well-defined and fairly arduous. This was intentional - the founding fathers wanted us to be able to change the Constitution, but only after deliberation and with the support of a super-majority of citizens. For information on the process to amend the constitution, go here.
The Democratic leaders of Congress are finalizing a plan so that the proposed health care reform will only have to meet 51 votes, not the usual 60 required to cut off discussion. The White House and Congress are using this technique to avoid debate on the matter (since Democrats have a majority in both the House and the Senate).
Health Care reform is an important and complex issue which should be discussed at length before being implemented. It looks like that won't be happening.
The top 10 recipients of the government's $700 billion financial bailout spent about $9.5 million on federal lobbying during the first three months of the year.
The biggest spender was bailed-out automaker General Motors Corp., which devoted $2.8 million to lobbying in the first quarter of 2009. It has received $13.4 billion in government loans and could get $5 billion more, according to a government report released Tuesday
It sure seems like our money just flows back and forth between Congress and the bailed out companies!
One of the concerns about the $750 Billion TARP program (to help stabilize banks) was the difficulty in making sure that the money was spent well. It looks like those concerns were justified:
In the first major disclosure of corruption in the $750-billion financial bailout program, federal investigators said Monday they have opened 20 criminal probes into possible securities fraud, tax violations, insider trading and other crimes.
The cases represent only the first wave of investigations, and the total fraud could ultimately reach into the tens of billions of dollars, according to Neil Barofsky, the special inspector general overseeing the bailout program.
The disclosures reinforce fears that the hastily designed and rapidly changing bailout program run by the Treasury Department and Federal Reserve is going to carry a heavy price of fraud against taxpayers -- even as questions grow about its ability to stabilize the nation's financial system.
Here's another example of how our government works....Congressmen and Senators get contributions from lobbyists and individuals who head companies that the Congress regulates, and then they steer earmarks (your taxpayer dollars) toward these companies.
It's legal as long as no one overtly says "give me this campaign contribution and I'll give you some government money" or "if you won't give me a contribution you won't get any government money"....something which former Illinois Governor Rod Blagojevich forgot.
John Murtha (D-PA) heads the House Appropriations Defense sub-committee and has long been known as someone who uses earmarks to their fullest. According to CBS News, he is currently funneling $31 Million in earmarks to 10 recent donors to his campaign.
The FBI is investigating several lobbying firms that are linked to Murtha.
The contractor was set to receive $1 million tax dollars. He said the military told him the money would come through a company called Commonwealth Research Institute, whose parent company, Concurrent Technologies, ranked among the largest earmark recipients. Both were set up with Murtha's help in his own hometown. The defense contractor said Commonwealth officials told him to get the money, he should "consider opening an office" in Johnstown, Murtha's hometown, and chided his company for not giving "enough campaign contributions to Murtha," and not making "a showing at Murtha's annual defense contractor fair."
The contractor told CBS News: "I wouldn't do it. We're just not going to play." He didn't get the funds.
Murtha also got $150 Million in federal funding to build an airport near his hometown (newly renamed the John Murtha Johnstown-Cambria County Airport). Only three commercial flights leave the airport on a given day (all headed to Dulles Airport in Washington D.C.), and many of them are half-full. They recently got $800,000 from the Stimulus Bill to repave a backup runway.
The D.C. voucher program has recently been dismantled by the Obama Administration, despite data that shows it is more substantially more effective than the D.C. public schools.
What happened, according to a Department of Education study, is that after three years the voucher students scored 3.7 months higher on reading than students who remained in the D.C. schools. In addition, students who came into the D.C. voucher program when it first started had a 19 month advantage in reading after three years in private schools.
Of course, President Obama's children attend a private school in Washington, and Secretary of Education Duncan did not move his family to Washington partly because of the poor schools.
Over and over again those who are supported by teacher's unions refuse to support charter schools and voucher programs, even though the data shows that students who use vouchers show significant gains over those who do not use vouchers.
One of the issues we face in our country is that our politicians rely on contributions from those whom they regulate. This is not an isolated issue - it happens over and over again.
Here is one small example, regarding Chris Dodd - a Democrat from Connecticut who is Chairman of the Senate Banking Committee. He is also known for ranting about the AIG bonuses while trying to hide the fact that he put the amendment in the Stimulus bill that specifically allowed for them (see previous posts).
More than $100,000 of the $1 million Dodd raised in the first three months of this year came from political action committees for the financial, insurance and real estate industries, according to his latest fundraising report. Among his donors were PACs for the American Insurance Association, Mortgage Bankers Association, Vanguard, Oppenheimer Funds, Charles Schwab, Real Estate Roundtable and Ameriprise Financial.
Dodd raised $608,995 from individuals, among them top executives from companies such as Fidelity, Citigroup and Citizens Financial Group. His take from Connecticut residents was $4,250, an especially anemic display of political enthusiasm for the state's senior senator.
Yesterday, President Obama asked his Cabinet to save $100 Million out of their budgets. While it's always good when the government cuts back expenditures, $100 Million is a tiny percentage of the $1 Trillion operating budget for the cabinets this year alone (it's about 1/10000 of a percent).
So let's not fool ourselves that government spending is being reined in. This year will be the biggest budget in our history, and this year's deficit will by over 4 times larger than last year's deficit.
Granted, the Heritage Foundation is a conservative organization. However, they do a good job of reporting facts. The numbers are not made up. The picture and example in this post say it all. And just to reiterate. Any money that they do "cut" is not going back to the taxpayers. It is just "less overspending".
The Obama Administration has appointed at least 18 "czars" of various things. We now have a Border Czar, Energy Czar, Urban Czar, Infotech Czar, Faith-Based Czar, Health Reform Czar, new TARP Czar, Stimulus Accountability Czar, Non-Proliferation Czar, Terrorism Czar, Regulatory Czar, Drug Czar, Economic Czar, Car Czar, Guantanamo Closure Czar, etc. etc.
Sen. Robert Byrd (D-W.Va.), who for decades has battled White House power and championed congressional clout, is questioning President Obama's appointment of "czars" to oversee key policy areas, including energy and climate.
"The rapid and easy accumulation of power by White House staff can threaten the Constitutional system of checks and balances," Byrd wrote in a letter to Obama. "At the worst, White House staff have taken direction and control of programmatic areas that are the statutory responsibility of Senate-confirmed officials."
The National Debt is now over $11 Trillion dollars. This does not include unfunded obligations for Social Security and Medicare (all those FICA taxes you are paying have been spent on current budget programs).
The Peterson Foundation estimates that the national debt including these obligations is $56.4 Trillion as of September 30, 2008. That comes out to $483,000 per household or $184,000 for every man, woman and child in this country.
This isn't even counting the debt we are scheduled to pile up this year and next ($3 Trillion more).
Yesterday over 250,000 people in over 800 locations across the country protested the high level of government spending and control in our lives.
Here is a brief sampling (I'm just listing a few headcounts - it would take too much time and space to list them all):
Chicago, IL 4,000 - 5,000 San Antonio, TX 10,000 St. Louis, MO 10,000 Columbus OH 3,500 - 5,000 Rancho Cucamonga, CA 2,000 Fort Worth, TX 4,000 - 5,000 Nashville, TN 10,000 Montpelier, VT 1,000 Denver, CO 5,000 Naples, FL 3,000 Lansing, MI 4,000 Gilbert, AZ 1,000 Colorado Springs, CO 2,500 Johnson County (KC area) 5,000 Liberty Memorial (KC) 5,000 Canton, OH 2,000
And on and on and on....if you want more information, go to taxdayteaparty.com or michellemalkin.com. What's really amazing is the number of small towns that had 200 or 300 or 500 people show up!!
The Obamas reported $2.7 Million in income last year, mostly from sales of his books. They paid $855,323 in federal taxes. They made $4.2 Million in 2007.
The top 1% of earners (the richest of the rich) pay 40% of all U.S. income taxes.
The top 10% of earners pay 71% of all income taxes.
The bottom 50% of earners pay 3% of all income taxes.
Over 40% of Americans pay no income tax.
Of course we all pay sales tax, FICA taxes, state and local tax, property tax, gasoline tax, liquor tax, etc. etc. As local and state governments struggle to balance their budgets look for these to increase.
We attended the Chicago Tea Party at noon today, which was one of hundreds (over 700 total) across the nation today.
There was a peaceful crowd of 4,000-5,000 and several nonpartisan speakers. There was a wide cross section of people there - old and young, blue collar and white collar.
People were very concerned with both the rate of spending our government has embarked on and the government intrusion and control that seems to expand daily.
This past weekend, several hundred people turned out in Pittsburgh and Lincoln Nebraska to protest government spending.
This Wednesday, April 15, is the day when protests are scheduled across the country. For information, go to www.taxdayteaparty.com.
Media elites from both the left wing and right wing continue to mock the Tea Parties....obviously they don't spend much time with "regular people" or they might have a better understanding of why people are concerned.
(Reminder: the U.S. Fiscal Year runs from October 1 through September 30th.)
The deficit for the first six months of the fiscal year which began on October 1 was 956.80 billion dollars, according to the Treasury's monthly statement of receipts and outlays...
...The CBO said its budget deficit estimate for fiscal 2009, which ends on September 30, would be four times the 2008 record shortfall and amount to 13.1 percent of the country's total economic output. (emphasis added)
We are now hearing that President Obama sees signs of optimism from the economy. Could it be a result of the actions of Congress and this Administration, in moving so quickly to pass a huge stimulus bill?
White House officials say the bulk of the money will start hitting the streets later this year and early next, with the goal of spending 70 percent of it by the summer of 2010.
Is it possible that we could be in relatively the same economic position without having spent 800 Billion dollars that we don't have? We will never know.
The good news: some of the delay in spending the funds is because state and local officials must show plans for how they will use the money before they can get it.
If you get most of your news from radio, TV or newspapers, you rely on them as "gatekeepers"...they decide what stories you hear and what stories you won't hear.
Interestingly, a liberal advocacy group called Families USA recently marketed stories on people who lack health insurance....and over 200 media headlines were the result. As a result, we hear over and over about uninsured people and the need for health care reform.
The other day I heard 6-7 headlines on the radio news about people who had been shot in various states...by piling them on one after another, it made it sound like a huge outbreak of violence in this country. I wondered if this was part of a push for greater gun control. In a nation of 300 million people, there are bound to be some problems. When you gather incidents across all states and report them one after another, the perception is that the problem is a big one.
Back to health care....while there are issues with our health care system, it is interesting to look at facts. For example, it is widely reported that 47 million (out of some 300+ million) Americans lack health insurance. According to the Census Bureau, of these 47 million:
• 9.5 million people are illegal aliens • 8.3 million uninsured people are those who make between $50,000 and $74,999 per year and choose not to purchase insurance • 8.7 million uninsured people are those who make over $75,000 a year and choose not to purchase insurance
So less than 7% of the population wants insurance and does not have it. The Congressional Budget Office estimates that 45% of those without insurance will have insurance within 4 months. Again, something that we may want to address, but hardly the widespread phenomenon that we are told about.
A recent Rasmussen phone survey showed 53% percent of Americans prefer capitalism over socialism, while 20% say socialism is better and 27% aren't sure.
Breaking it down by age group, the under-30 crowd prefers capitalism to socialism by only 37% to 33%, with 30% undecided. Thirty-somethings prefer capitalism over socialism by 49% to 26%, and of adults over 40, only 13% believe that socialism is better.
There is a partisan gap as well. Republicans - by an 11-to-1 margin - favor capitalism. Democrats are much more closely divided: Just 39% say capitalism is better while 30% prefer socialism. As for those not affiliated with either major political party, 48% say capitalism is best, and 21% opt for socialism.
Pirates have been seizing ships off the coast of Somalia. The latest ship seized is a U.S. flagged, Danish owned ship that was taking food aid for Somalia and Uganda. 20 American citizens were crewing the ship. There are reports that the crew has re-taken the ship, but they are unconfirmed. A U.S. Navy vessel is on its way to the area.
Last weekend pirates hijacked three vessels, along with another hijacking on Monday. In 2008 there was an outbreak of piracy, which subsided after various countries sent naval ships to the area.
As you may recall, back in March Congress passed the Omnibus Budget Bill for 2009. This included an item that eliminated a pilot NAFTA program (prior post).
Over 150 companies which include GE, Walmart and the American Farm Bureau issued a joint letter today urging Washington to quickly end this dispute. They state that it is putting about 26,000 jobs at risk.
Here's another post which is more specific to the Northwest and the impact on it's agricultural exports.
This weekend there were taxpayer protests in Santa Barbara (500+ people), Charlotte (200 people), Montana (500-1000 people), and Long Island (300 people).
Protests are planned in cities around the country on April 15th. For more information, go to taxdayteaparty.com. This is a purely grassroots effort, with volunteers in many states.
This weekend, North Korea launched a long-range rocket, which is commonly believed to be a step toward their ability to launch nuclear warheads.
Also this weekend, President Obama called for the U.S. to lead the way to a world without nuclear weapons.
Obama proposed doing so by reducing America’s arsenal, if not altogether eliminating it; hosting a summit on nuclear security; seeking ratification of the Comprehensive Test Ban Treaty; strengthening the Nuclear Non-Proliferation Treaty; and pursuing a new agreement aimed at stopping the production of fissile materials.
It doesn't seem like a very good time to be talking about reducing our arsenal!
A few banks are repaying the TARP funds that they received last fall from the government. Others are starting the repayment process. According to this, some are being refused....keep in mind that this is one source, but read the whole thing. Very interesting....
Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.
Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.
By January 2014, incandescent light bulbs that are 40 Watts or greater will be banned in the United States. This was part of the federal Clean Energy Act of 2007 was signed into law on December 19, 2007.
This will mean that you will only be able to buy compact fluorescent light bulbs from that point onward.
I have tried these light bulbs, and they are very dim, don't last very long (forget the 10,000 hours promised on the package), and require special disposal (they contain mercury, so if people throw them in the garbage instead of taking them to special disposal locations, our landfills will be full of mercury). Also, if you have dimmer switches, they will no longer dim (fluorescent bulbs only go on and off).
Earth Hour Don't forget, tonight is the night of "Earth Hour". If you believe in global warming, you are supposed to turn off your lights for one hour starting at 8:30 pm.
On the other hand, if you haven't drunk the kool-aid yet... you might want to consider turning on every light in the house (grin).
GIVE/SAVE ACT The GIVE/SAVE act (HR 1388) was passed with the language about MANDATORY service removed. HOWEVER, there is an alternative bill being floated (HR 1444) that has the language back in it. Keep an eye on that one.
Universal Health Coverage Looks like the House voted that this legislation (part of the 2010 budget process) can be "fast tracked". That means that the Senate can pass it with only 51 votes (not the customary 60). Oh well....
Tea Parties
Here's the website that can help you find any of the April 15 Tea Parties that are being planned. We'll be going. I encourage you to go, and take a friend!
California is thinking about banning dark-colored cars, because it takes more energy to cool them via their air conditioning.
The California Air Resources Board has proposed regulations requiring that paint and glazing (on windows and sunroofs) reflect certain amounts of energy, and there is no black paint that will meet these requirements. It's not clear if other dark colors could be made more reflective in order to meet the requirement.
Unfortunately, what California does often affects other states because they are such a huge market.
At a press conference on Thursday, National Intelligence Director Dennis Blair talked about releasing some of the detainees at Guantanamo into the U.S. as free men, and also potentially giving them money and/or support to help them out.
During his news conference, Blair also said the Obama administration is still wrestling with what to do with the remaining 240 detainees at the Guantanamo Bay Naval Base, which the president has ordered closed.
Some of the detainees, deemed non-threatening, may be released into the United States as free men, Blair confirmed.
That would happen when they can't be returned to their home countries, because the governments either won't take them or the U.S. fears they will be abused or tortured. That is the case with 17 Uighers (WEE'-gurz), Chinese Muslim separatists who were cleared for release from the jail long ago. The U.S. can't find a country willing to take them, and it will not turn them over to China.
Blair said the former prisoners would have get some sort of assistance to start their new lives in the United States.
Attorney General Eric Holder has issued an e-mail and flyer inviting employees to attend a speech given by Donna Brazile, a Vice Chairman of the Democratic National Committee. Not only are our tax dollars paying her speaker's fee, but Holder's flying encourages all supervisors to grant official time to employees to attend the event (so we get to pay their salaries while they go and listen).
Glad to see the Justice Department is non-political and concerned about spending our money wisely.
The “Generations Invigorating Volunteerism and Education Act” (GIVE act). HR 1388 has already passed the House and is on its way to the Senate.
You can read the final version of the House bill here. The legislation is a long string of amendments to existing laws that make it almost impossible to understand. (Really. This legislation is incomprehensible. I challenge you to click on this link and try to read the bill.)
There appears to be little volunteerism and almost no education in the bill. But there are a lot of make-work government jobs for doing God only knows what.
Part of it sounds like the CCC (Civilian Conservation Corps from the 1930's) and part of it sounds like socialism. Read the whole thing, and if you don't like it, call your Senator.
But the question is, “compared to what?” Public pensions are woefully underfunded — they’re promising defined benefits, but may not be able to deliver. Defined-benefit private pensions are dragging companies like GM, Ford and Chrysler toward bankruptcy. And Social Security is on an unsustainable trajectory, which the political system knows but which politicians can’t bear to confront. At least when 401(k) balances go down, the whole system isn’t rendered insolvent.
Today, Senator Arlen Specter (R - PA) announced during a speech in the Senate that he will NOT support this legislation (at this time). Actually, what he said was that he will not vote to stop an expected Republican filibuster. This would have the same effect, as 60 votes are needed to pass the bill.
This comes after reports of activity over the weekend by Starbucks, Costco and Whole Foods to offer a compromise version, which has received a "luke-warm" reception at best.
With the announcement by the Senator, this would be a moot point.
We'll keep an eye on this, and see what happens next.
A bill has been introduced into the U.S. Senate which would allow newspapers to restructure themselves as nonprofit entities, with special tax breaks. They could still run ads, and any money they get from ads would be tax free. Also, they would still charge subscriptions, and that money would also be tax free.
Basically, if this law passes, they would do what they do now, but not pay any taxes.
The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.
The government at present has the authority to seize only banks.
Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process.
Yesterday Treasury Secretary Geithner unveiled the Administration's plan to deal with all of the "toxic" or bad assets held by some banks. The program intends to use $100 Billion of TARP funds, plus financial guarantees from the FDIC and Federal Reserve, to buy up bad loans and real estate related securities from troubled banks.
In order to succeed, the plan will need to attract private investors to buy the debt, and those private investors will have to accept the U.S. government as a 50-50 partner. Private investors may be leery of the participating, given recent Congressional moves to retroactively change the law and the current bashing of profits and capitalism in Congress and the Administration.
The way it's supposed to work is that the Federal Government and a private investor would jointly buy a "bad loan", thus allowing the bank to get that off of their books. Both the Government and the investor would be taking a risk - if the loan ends up getting paid off, they will profit, but if it does not, then both will lose the money. The hope is that this can help banks rebuild their balance sheets and maybe allow something to be salvaged from the bad loans.
All too often, Congressmen accept donations from those organizations whom they are supposed to regulate. Here is one example - Senator Chris Dodd (D-Conn.), who is also being investigated for getting sweetheart mortgage deals from Countrywide Financial.....this is from a Connecticut newspaper:
Let's take our own U.S. Sen. Christopher J. Dodd as a prime example. As a ranking member of the all-important U.S. Senate Committee on Banking, Housing and Urban Affairs between 2003 and 2008, Dodd accepted donations from the nearly defunct insurance giant American International Group totaling nearly $225,000. In 2008, while we looked to him to represent our best interests, he received $157,194 from a now-quasi-nationalized Citigroup Inc., part of his total annual take of $854,200 from all TARP recipients, according to the Center for Responsive Politics. (emphasis added)
How can he truly represent his constituents' best interests when he is accepting vast sums of money from organizations that the government has assisted through the infusion of federal tax dollars? While legal, an objective observer should question the judgment and ethics of our state's senior senator.
Read the whole thing for more troubling activities by Dodd.
Two Congressmen (Pete Stark, D-CA and Eliot Engel, D-NY) have been claiming Maryland real estate as their primary residences so that they can get a tax break. Aren't they supposed to have residency in the state where they are Congressmen?
California congressman Pete Stark has improperly claimed a Maryland lakefront home (assessed at $1.7 million) as his primary residence in order to qualify for a special real estate tax break...
Earlier this month, Congressmen Eliot Engel, a lifelong resident of the Bronx, was outed for claiming the Maryland real estate tax break on his Maryland home (formerly owned by ABC's Ted Koppel and Wonder Woman Lynda Carter) assessed at $938,000.
TARP is the $700 Billion program started last fall and continued under the Obama Administration to help with the banking and credit crisis. Companies who have received TARP funds are continuing to give donations to members of Congress.
While a few big firms, such as Wells Fargo and JP Morgan Chase, have curtailed their campaign giving, others are quietly doling out cash to select members of Congress, particularly those who serve on committees that oversee TARP...
House Speaker Nancy Pelosi and House Financial Services chair Rep. Barney Frank both said recently they won't take donations from TARP recipients. But House Democratic fundraisers have quietly passed the word that the party's campaign committee will resume accepting them—but down the road, not right now.
Several more taxpayer protests, dubbed "Tea Parties" after the Boston Tea Party, were held this weekend. Ironically, the 40 people who protested the AIG bonuses got national coverage (journalists outnumbered protestors by more than 2 to 1), while the Tea Parties did not.
Orlando, Florida 4,000 people Raleigh, NC 300-400 Ridgefield, Conn. 200-300 Lexington, KY 1,200 - 1,500 Solomons Island, Maryland 300
The Congressional Budget Office figures, obtained by The Associated Press Friday, predict Obama's budget will produce $9.3 trillion worth of red ink over 2010-2019. That's $2.3 trillion worse than the White House predicted in its budget.
Worst of all, CBO says the deficit under Obama's policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.
It took us 40 years to get to a national debt of $11 Trillion. If these plans are adopted, it will take only 9 more years to get to $20 Trillion.
"The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply."
Why do we care? There is a risk that these actions could dilute the value of the dollar (which dropped sharply upon this news) and cause inflation in the future.
This is in addition to an "unprecedented expansion of lending by the Fed."
"In effect, the central bank has been lending money to a wider and wider array of borrowers, and it has financed that lending by using its authority to create new money at will..." (emphasis added).
"Since last September, the Fed’s lending programs have roughly doubled the size of its balance sheet, to about $1.8 trillion, from $900 billion. The actions announced on Wednesday are likely to expand that to well over $3 trillion over the next year...The Fed’s action is an expansion of its effort to bypass the private banking system and act as a lender in its own right."
By adding more money to the system, the Fed hopes to head off deflation, but runs the risk of setting off inflation.
This is a complicated issue that many of us don't understand fully.
To start you thinking, try this video (hat tip Anchoress):
Then, for a good basic description of a market economy and how we got to where we are, read this article: The Money Meltdown.
Yesterday, Congress passed a bill to tax 90% of the AIG bonuses that were given out last week.
This is the same Congress that passed the Stimulus Bill with the amendment specifically allowing those bonuses a few weeks earlier.
Senator Dodd (D-Conn.) is taking fire for putting the amendment in the bill. Senator Dodd is saying that the Administration and Treasury Department told him to put the bonus language in the amendment. C-SPAN video shows that both Congress and Treasury knew about the bonus amounts by March 3rd.
So, the people responsible for allowing the bonuses are the ones yelling the loudest about them, and now they have passed a law that sets precedent for future laws taxing particular people or industries just because Congress doesn't like how they are acting. That's hypocrisy (and not good leadership).
By the way, regardless of how you feel about the AIG bonuses, the stirring up of a mob mentality (complete with death threats) and Congressmen wanting to release the names of people who received bonuses so people could go to their houses and "protest" is just plain dangerous.
In case you didn't notice, while we were eating corned beef and cabbage and washing it down with green beer the National Debt rolled pass the $11,000,000,000,000 ($11 TRILLION) mark.
470 firms have received taxpayer bailouts. A House Committee has checked the records of 23 of them, and found that 13 of the 23 had unpaid federal taxes of over $220 million.
"Banks and other firms receiving federal money were required to sign contracts stating they had no unpaid taxes...But he said the Treasury Department did not ask them to turn over their tax records."
If the companies knowingly signed a contract with false information, they can be prosecuted for fraud.
Here's who AIG made campaign donations to for the 2008 election cycle. AIG continued with contributions even after they received their first set of bailouts last year.
Here's the list of top AIG recipients for the 2008 campaign:
1. Sen. Chris Dodd, D-Conn., $103,100 2. Sen. Barack Obama, D-Ill., $101,332 3. Sen. John McCain, R-Ariz., $59,499 4. Sen. Hillary Clinton, D-N.Y., $35,965 5. Sen. Max Baucus, D-Mont., $24,750 6. Former Gov. Mitt Romney, (R) Pres $20,850 7. Sen. Joe Biden, D-Del., $19,975 8. Rep. John Larson, D-Conn, $19,750 9. Sen. John Sununu, R-N.H., $18,500 10. Former Mayor Rudolph Giuliani (R) Pres $13,200 11. Rep. Paul Kanjorski, D-Pa., $12,000 12. Sen. Dick Durbin, D-Ill., $11,000
Fannie Mae (while receiving financial backing from the Treasury department of over $200 Billion and asking for $15.2 Billion in taxpayer bailouts) has announced plans to increase bonuses for this year. Bonuses will range from $470,000 to $611,000 per recipient, which is more than double what they were last year.
Rival mortgage lender Freddie Mac, who has also Treasury backing of $200 Billion and has asked for $45 Billion in bailouts, said they were formulating similar plans.
Both organizations cite a need to keep key employees as a basis for these bonuses.
In the midst of all the outrage from politicians at the bonuses recently paid to AIG executives, one fact stands out:
a provision in the Stimulus Bill specifically allows bonuses contracted for on or before February 11, 2009 (all of the AIG bonuses fulfilled this provision).
Who put this provision in the stimulus bill? Senator Chris Dodd (D-Conn.). Interestingly, Senator Dodd received more campaign contributions from AIG than any other congressperson.
Perhaps next time they should read the bill before they vote on it!
Apparently, the recently passed 2009 Omnibus Budget/Spending bill included a provision that killed a program that was implemented as part of the 1995 NAFTA (North American Free Trade Agreement). I wonder if anyone even knew it was there. (grin)
So, today Mexico announced that it will retaliate (which it has a right to do so) and increase duties on 90 US products which we export to them (totaling over $2 billion).
Some folks have had concerns about the program, centered around the safety of the Mexican trucking companies. As a result, the program has not had heavy participation.
But I think the posting from the Club For Growth sums it up best... "This didn't have to happen".
The federal budget deficit for the first 5 months of Fiscal 2009 is at $765 Billion. This is $500 Billion more than the same period last year. (Note: the government fiscal year begins in October).
The Obama Administration estimates the total deficit for 2009 will be $1.75 Trillion. The 2008 deficit was $455 Billion.
Deficits are projected to by larger than ever for the foreseeable future, adding to the overall national debt at an amazing rate.
"The Taliban's new top operations officer in southern Afghanistan had been a prisoner at the Guantanamo Bay detention center, the latest example of a freed detainee who took a militant leadership role and a potential complication for the Obama administration's efforts to close the prison. U.S. authorities handed over the detainee to the Afghan government, which in turn released him, according to Pentagon and CIA officials." From an AP report - read the whole thing here.
The Pentagon estimates that 60 former Guatanamo detainees have shown up on foreign battlefields. President Obama signed an Executive Order in January ordering the closure of Guatanamo within a year. He did not specify what would be done with the 250 detainees currently held there.
As long as we try to fight terrorism as a law enforcement issue (rather than a military action), this kind of thing will continue to occur.
In 2008, only 35 counties (concentrated in California and Florida) accounted for 50% of all foreclosures. Four states (Nevada, Arizona, Florida and California) have the highest foreclosure rates by far.
"Veterans Affairs Secretary Eric Shinseki confirmed Tuesday that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance.
But the proposal would be "dead on arrival" if it's sent to Congress, Sen. Patty Murray, D-Washington, said. "
Let's hope so. It's amazing that they are even considering it.
Remember, much of the spending in the original $787 Billion stimulus package won't be spent until 2010 or later, so it's unclear how they know more is needed.
Let's hope they read this one before they vote on it!
"On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71."
Criticism centered on the lack of a clear plan and delay in enacting key parts of the plan to rescue banks. Most of the economists surveyed expected the economy to begin recovering next October.
Estimates are that over 200 U.S. citizens have been killed in these drug wars, and so far in 2009 over 1,000 Mexican citizens have been killed. Much of the violence is in towns near the U.S. border.
Mexico has beefed up its troop presence in these areas.
Governors Mark Sanford (R-South Carolina) and Rick Perry (R-Texas) have both made announcements today that may prove politically unpopular for them, but which they feel are the best course of action for their respective states.
Governor Perry is refusing some of the stimulus money designated for Texas because it would require the state to change how it defines unemployment. His concern is that this will create an increased burden on business. Per his office...
Strings attached to the unemployment insurance stimulus dollars would require an unprecedented change in Texas’ definition of unemployment, increasing the tax burden borne by Texas employers. This increased burden would counteract the stimulus package’s objective of job creation by leading companies to limit hiring and raise prices on products, hindering their ability to overcome the economic crisis and ultimately limiting growth.Full Article...
Governor Sanford has made a formal request to the President, asking that he be offered some flexibility with 25% of the money designated for South Carolina. Instead of being "forced" to use it as proscribed by Congress, he would like to pay down the states debt (i.e. strengthen their balance sheet). He feels that would be the best use of the money for this particular State. On the left side of this link is the 3 page letter to the President. I encourage you to read it.
First the candidate for Undersecretary for International Affairs, Caroline Atkinson, had to withdraw her nomination because of a tax problem.
Then deputy treasury secretary pick Annette Nazareth withdrew from possibly being the next deputy treasury secretary because of concerns over her tenure as head of the Securities and Exchange Commission (SEC), particularly since she was in charge during the Bernard Madoff fraud.
Now H. Rodgin Cohen has withdrawn from consideration as the next deputy treasury secretary, most likely because he as been a lawyer for many major players on Wall Street.
John Stossel teams up with Drew Carey for a new special on government waste. I believe it is at 9 pm CDT (yup, Daylight Savings Time!). I don't know what the specifics of this particular segment on bailouts will be. But if I was a betting person, I'd guess that you will not agree with some of their views. But hey... that's what this is all about, right?
Today the Senate passed the $410 Billion Omnibus Bill for 2009, including over 8500 earmarks and an overall 8.7% increase in spending over 2008 (see posts here, here, here and here for details).
Both the House and the Senate introduced the Employee Free Choice Act (EFCA) today, commonly known as Card Check.
See our earlier post for details on the legislation.
The most controversial part of the bill is that it will eliminate the secret ballot when workers vote on whether or not to unionize. This could lead to intimidation.
Another concern is the arbitration clauses - the bill will force arbitration by the government (or a government chosen arbitrator) if management and labor can't come to an agreement. This inserts the government into a process that some think should remain between labor and management.
Interestingly enough, both George McGovern and Al Sharpton oppose the bill, because it will deprive workers of their right to a secret ballot.
Freeman's nomination concerned Democrats and Republicans alike. Some of the concerns centered around Freeman's very close financial ties to the Saudi Arabian government, his anti-Israel stance, his favorable view of Chinese repression in Tiananmen Square, and his implication that America's support for Israel was to blame for September 11th.
"An increasing number of Iraqi detainees are refusing to leave detention centres despite being eligible for release because they want to complete studies begun behind bars, a US general said on Sunday.
Some parents of juvenile detainees, too, have asked that their children remain behind bars so they can continue their schooling, said Stone, the commanding general for US detainee operations in Iraq.
The US military, he added, was not encouraging the trend."
The US military offers a wide range of educational programs. Some parents of juveniles have even asked that their other children be detained, so they can benefit from these programs. Full article is here.
"The opportunities to avoid the crisis lie in the past two or more decades. At some level we knew that we must save more and borrow less, that our ever-growing trade deficits were a threat to future prosperity, etc. We put those concerns aside, instead indulging in an orgy of consumer spending. Larger houses, more cars per household, granite counter-tops, insane government spending for every politically powerful group — from insane defense spending to bountiful agricultural subsidies.
Now the party ends and the hang-over begins. We fumbled our time as world hegemon and the world turns to something else — as yet unknown."
Quoted from a very interesting blog, fabiusmaximus.wordpress.com. He has lots of detailed analysis of where we are, how we got there, and what might lie ahead.
In addition to pledging to "reset" our relations with Russia, the Obama Administration has pledged to meet with Syria and Iran without any preconditions. In fact, there was a four hour meeting Saturday been U.S. and Syrian officials.
The Administration is also inviting Iran to a conference on Afghanistan, in the hopes that Iran can help stabilize the government in Kabul and cut down the flow of arms into Afghanistan.
Several more taxpayer protests were held across the country.
Green Bay, WI 1,200 people Olathe, KS 150-200 Harrisburg, PA 200-300 Fullerton, CA 8,000 - 12,000 (They were protesting both Federal and California policies) Salt Lake City 100 Yonkers, NY 350 Lafayette, LA 400-500 Monterey, CA Maui, Hawaii Boise, ID
There may be others...they are all locally organized, so there's no central source of info. And the crowd estimates are just that...estimates.
The $410 billion Omnibus Budget Bill has been deferred until next week (week of March 9).
Some moderate Democrats and many Republicans are concerned that it has too many earmarks (8500) and duplicates some of the spending that was in the Stimulus Bill. It also has about an 8% increase in overall spending, including additional spending on Congressional offices, etc. (see previous posts).
The Omnibus Bill has already passed the House - it is the Senate that didn't pass it on Thursday. If you have an opinion, contact your Senator. Voting will take place on Monday or Tuesday, and President Obama has said he will sign it, even though it violates his campaign pledge of no earmarks.
In January, a lot of Mastercard and Visa users were hacked....Heartland Payment systems processes MC and Visa payments for restaurants, retailers and others and their system was hacked in January.
So be sure to check your credit card statements for any charges you may not have made....your liability is zero if you didn't make the charge. Same with debit card charges, although if they hacked your account your money is gone and you will have to fight to get it back.
Brits feel that their Prime Minister, Gordon Brown, was snubbed by the White House this week. A joint press-conference with Brown and Obama was cancelled due to "snow," and other typical diplomatic niceties were missing.
Secretary of State Hilary Clinton gave Russian Foreign Minister Sergei Lavrov a button that to symbolize our new relationship with Russia -- it was supposed to say "RESET" in Russian (because Obama wants to "press the reset button on our relationship with Russia") but in fact it said "OVERCHARGE" in Russian. Don't we have anyone who can spell in Russian?
The Senate majority leader (Harry Reid) assumed that they would be able to pass the $410 billion Omnibus Budget Bill last night or today (60 votes are required). So, instead of making sure that he had all the votes; he and others decided to spend Thursday at the White House for the big "Health Care Reform Summit".
Well, guess what? They are a few votes short! Two democratic senators oppose it, due to the amount of spending and earmarks. (As a reminder, this represents an 8% increase over last years spending; and includes money for programs that have already been allocated funds as part of the "stimulus" package).
So what happens next? A stopgap measure to provide funding at current levels is in place for next week. Senator Reid expects to vote on it again as early as next Tuesday.
It is not too late to contact your senators over the weekend or Monday.
One possible outcome is to just pass a bill that keeps spending flat, which would save about $20 billion.
President Obama campaigned on ending earmarks. He is getting ready to sign the $410 Billion Omnibus Bill (see earlier post) with 8500 earmarks totaling $7.7 Billion.
And in the stimulus bill that was passed a few weeks ago, there were no "formal" earmarks -- they just made items so specific that only one location or one company could fulfill them (not technically an earmark, but with the same result). Look forward to much more of this as Congress spends your money while telling you they aren't spending money on earmarks.
While most earmarks are for small amounts (millions as opposed to trillions) they all add up, and they are often a waste of taxpayer's money.
After getting a raise in salary last month, Congress has also put in the 2009 Omnibus Spending Bill an 11% increase in spending on itself (from $3.97 Billion to $4.4 Billion). Inflation has been 0-1%.
This will go for things like pay increases for staff, special expense accounts, renovations to meeting rooms, and new Capitol Visitor Center, capitol infrastructure improvements, etc.
Some of these things may be necessary, but an 11% increase isn't the belt-tightening that we are told our leaders are doing.
Drug gangs are running rampant in Mexico, killing many civilians and police officers. U.S. Joint Forces command lists Mexico as being at risk of a "rapid and sudden collapse".
In Juarez, 230 people have been murdered since January 1st. The drug cartels are battling to control the drug trade, and the Mexican government is battling them.
The politics on this will be fun to watch. Typically, this legislation would originate in the House and if passed, then proceed to the Senate.
However, it looks like this process might be reversed. Why would they do that?
There are many Democratic congressman in the House that are from states that have "Right to Work" rules (i.e. no unions) or represent conservative districts. If they vote YES on this bill, their constituents will not be pleased. They are worried that if they vote YES but then the bill does NOT pass in the Senate, then they will run the risk of not being re-elected.
Having the Senate vote first can provide them some "cover". If the Senate does NOT pass the bill, then Pelosi will not bring it up for a vote in the House. If the bill DOES PASS in the Senate, those democratic congressman who would put themselves "at risk" for re-election with a YES vote would probably be able to abstain (and thus not upset their constituents).
Capitalism is alive and well (although definitely under attack by the politicians and media). We take so much for granted here in this country. Here's a link to a short article from Cafe Hayek. There's a link inside of it to a short essay which is worth the 60 seconds it takes to read.
Next time you're in the grocery store, Home Depot, or whatever; you might want to take a minute to pause and look around. We have so much to choose from (sometimes there are too many choices!). And all of this due to the individual actions of thousands/millions of people, each acting in their own self interest.
What do you think it would look like if it was managed by the politicians in Washington, DC?
During the campaign, President Obama said that he wanted to raise energy prices so that Americans would consume less energy. This is based on two assumptions:
that there is a global warming crisis, and
that it is primarily man-made.
We will not debate (in this posting) whether or not these are valid assumptions.
If you assume that they are true, then you can help the environment by forcing fossil fuel consumption down by making it much more expensive, so that people will consume less energy generated by fossil fuels . A common strategy for achieving this type of result is called "Cap and Trade".
President Obamas recent budget draft assumes $80 billion of revenue from "Cap and Trade" beginning in 2012 (article). This will grow to be upwards of $300 billion per year.
SO, JUST WHAT IS CAP & TRADE?
CAP
Cap-and-trade plans work by having the government sell to businesses the right to emit a certain amount of carbon dioxide or other gases. These permits set an enforceable limit (cap), on the amount of greenhouse gas pollution that the company is allowed to emit. Over time, the limits become stricter, allowing less and less pollution.
TRADE
It will be relatively cheaper or easier for some companies to reduce their emissions below their required limit than it will be for others. The companies who emit less than their allowance can sell their extra permits to companies that are not able to make reductions as easily.
MONEY
Basically, this creates a huge new revenue stream for the federal government.What will they do with it?The president’s plan assumes $80 billion of additional revenue in 2012.$65 billion would be used for the “Making Work Pay" tax credit (which offsets payroll taxes for about 95 percent of workers), while $15 billion per year gets set aside for various clean-energy technologies, energy efficiency, clean-car development, and so forth.
HOW WILL THIS IMPACT US?
ENERGY COSTS WILL INCREASE
The goal of this is to increase the cost of energy.Yes, you read that correctly.We are already using the cheapest energy sources available (fossil fuels).The renewable energy technologies are nowhere close to being cost competitive. So, to promote them the government is increasing the cost of the carbon-based energy sources.Duke Energy Corp. Chief Executive Officer James Rogers said President Barack Obama's plan to raise revenue from an emissions-trading system would increase electricity bills by as much as 40 percent in some U.S. states.
MORE WEALTH REDISTRIBUTION / GOVERNMENT CONTROL
This will generate $80 billion to $300 billion per year in additional revenues for the government.Businesses will pass on their additional costs (fee’s for permits, higher cost renewable energy sources) to consumers and other businesses.This will have a negative impact on economic growth, which again impacts us as workers and investors.Most important is the fact that more money is run through the federal government, who will “control the purse strings”.Think there won’t be some lobbyists hanging out around that pot of gold!
MINIMAL IMPACT ON THE ENVIRONMENT
Even if the assumptions listed above are correct, this will have minimal impact on the environment at the risk of inflicting great damage on the economy. More on this in a later post.
Ron Kirk, President Obama's nominee for U.S. Trade Representative failed to pay almost $10,000 in taxes in the past 3 years. This came to light when the Senate Finance Committee investigated his credentials for the job. The Senate will consider his nomination next week.
This is after several other nominees (Geithner, Daschle, Killefer, etc.) were identified as having underpaid their taxes.
In 2008, only 
