The Wall Street Journal is reporting that Treasury plans to give TARP bailout money to some struggling life insurance companies.
The Treasury Department has decided to extend bailout funds to a number of struggling life-insurance companies, helping an industry that is a linchpin of the U.S. financial system, people familiar with the matter said.
The department is expected to announce the expansion of the Troubled Asset Relief Program to aid the ailing industry within the next several days, these people said.
[snip]
Only insurers that own federally chartered banks will qualify for the program.
Well, that makes me feel a lot better. Not. Ron Humenny, founder and President of Starfire Investment Advisors asks the dreaded question: Will TARP soon be an acronym for 'Those Annuities R Problems'?
This video is priceless! Watch as the 'Prize Patrol' delivers huge checks to big banks, showers Treasury Secretary Geithner with cash and presents $28,000 invoices to unsuspecting taxpayers!
Finally...a voice of sanity and reason in Congress. No wonder he had to fight to keep his Republican leadership position; he makes too damned much sense and clings tenaciously to his principles. Shocking!
I have remained skeptical of the proposed Detroit Big Three 'bailout' or 'bridge loan', despite my principle livelihood depending on the automotive industry; our company is a tier 2 parts supplier. There are some real potential benefits to a Chapter 11 filing, such as the ability to scrap the union contracts and start over - a tempting prospect indeed from a competitiveness standpoint.
The national security argument, however, cannot be ignored; it has moved me to the 'yea' side of the ledger. That it has come to this is deeply distressing, but here we are nonetheless. We must play the hand we were dealt.
At the close of the Constitutional Convention in Philadelphia on September 18, 1787, as Benjamin Franklin emerged from the convention, Mrs. Powell asked him: "Well Doctor, what have we got, a republic or a monarchy?" "A republic if you can keep it" responded Franklin. We didn't.
It was not taken from us by a foreign power, nor by a sudden, unexpected coup. No, it was lost bit by bit, law by law, by a steady usurpation of power by our elected 'leaders', while we sat and watched and did nothing. The implementation of the 'Wall Street bailout' was the final nail in a free republic's coffin. Representative Virginia Foxx (R-NC) was correct when she said Friday, October 3, 2008 was the "...day America died."
During the Cold War, Nikita Khrushchev predicted that the United States would be taken without firing a shot. He was prescient. Here we are, a mere 50 or so years later, and most of the planks of the Communist Manifesto have been at least partially adopted by our American government.
The Ten Planks of the Communist Manifesto
1. Abolition of property in land and application of all rents of land to public purposes.Partially achieved: Eminent Domain laws, environmental laws, zoning laws.
2. A heavy progressive or graduated income tax.Fully implemented.
3. Abolition of all rights of inheritance.Partially achieved: Confiscatory estate taxes.
4. Confiscation of the property of all emigrants and rebels.Coming soon?
5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.As of Friday, October 3, 2008, with the passage of H.R. 1424 in the House of Representatives and the signature of President Bush, this is fully implemented.
6. Centralization of the means of communication and transport in the hands of the state.Partially achieved: FCC laws, Department of Transportation, government-owned AMTRAK and Conrail.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.Partially achieved: Agribusiness, zoning laws.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc.Fully implemented. 'Public schools' have become good-little-comrade indoctrination centers. Department of Education.
"Political power, properly so called, is merely the organized power of one class for oppressing another."
Every member of Congress who voted for the so-called Wall Street bailout violated their oath of office. The President violated his when he signed it. Those who voted 'no', for whatever reason, deserve our praise and thanks. The rest deserve to be unemployed. On November 4th, we have the opportunity to fire them and begin the process of restoring our country to her Constitutional roots.
Thomas Jefferson wrote the following in the Declaration of Independence:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it...
Burning Down the House: What Caused Our Economic Crisis. Keep your cursor on the pause button....you'll need to read some of the screen shots.
Just in case you are tempted to chalk this all up to partisan politics....former President Bill Clinton agrees. He told ABC News about the Democrats blocking reform of Fannie and Freddie when he was in the White House:
Four years ago, Congressional hearings were held. Republicans warned of impending, serious problems at Fannie and Freddie. Democrats defended both companies. Watch them, in their own words:
Remember as you watch these videos that:
* Franklin Raines earned $90 million in his five years as Fannie Mae’s CEO, from 1999 to 2004, while cooking the books. One of his successors, Daniel Mudd, collected $11.6 million. Fannie Mae — a quasi-governmental corporation created by Congress to support FHA-insured or VA-guaranteed secondary mortgages — failed so badly in late 2008 that, to prevent total collapse, the feds bailed it out for $200+ BILLION (along with sister organization Freddie Mac) and took control of it.
* In August 2007, Bank of America bought failed subprime-mortgage peddler Countrywide Financial for $2 BILLION — after CEO Angelo Mozilo sold $121 million in company stock and the feds bailed it out for $51 BILLION.
* In October 2007, the board of Merrill Lynch fired CEO Stanley O’Neal, who collected a cool $160 million bonus payout on his way out the door. His successor, John Thain, earned $17 million for one year — before selling Merrill to Bank of America for $50 BILLION.
* James Cayne, as CEO of Bear Stearns, “earned” $49.31 million in the last two years of his firm’s pitiful existence — before collapsing, receiving a $29 BILLION government bailout, and becoming part of JP Morgan Chase.
* Richard Fuld, CEO and largest shareholder of Lehman Brothers, collected $354 million in total compensation in the past five years — before declaring bankruptcy and melding into Barclays Financial.
* Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke orchestrated an $85 BILLION withdrawal from taxpayer coffers to save insurance giant AIG from bankruptcy.
* Alan Fishman, CEO for just 17 days of Washington Mutual, the nation’s largest S&L, floated out the door on an eye-popping $20 million parachute as it became the largest bank failure in US history, taken over by FDIC, and handed to JP Morgan Chase for the bargain price of $1.9 BILLION.
Now, Congress and the President can't understand why 'we the people' are angry and protesting the ADDITIONAL $750 BILLION dollar bailout of Wall Street. Someone needs to get a clue.....and it isn't us, folks.
Michigan Congressman Thaddeus (Thad) McCotter (R-11) issued the following press release this morning. Good on ya, Thad! [emphasis added ~Ed]
Washington, DC – Representative Thaddeus McCotter (R-MI), Chairman of the House Republican Policy Committee, today released the following statement:
“I was not elected to abet American socialism.
Thus, I am opposing the Bush administration’s taxpayer funded, trillion dollar Wall Street bailout; and, alternatively, proposing a pro-taxpayer, free market, private recapitalization plan for the banking system; ending financial chaos; and preventing the advent of Wall Street Socialism.
Drawn from the free-market ideas of the public and our members, this proposal is premised upon the following principle: Our prosperity is from the private sector not the public sector.
True, some will still assert the administration’s support of Wall Street’s leveraged bailout at taxpayers’ expense is the only answer to this crisis of confidence. They are dead wrong.
First, we must never punish the innocent to profit the guilty.
Secondly, a taxpayer bailout is never the first or only resort. If it is claimed to be so, the object of the bailout is already too far gone to be saved.
Thirdly, this trillion dollar taxpayer bailout will not prevent a Great Depression. It will promote a Greater Depression.
While there exist a host of other reasons, for the sake of brevity let me reiterate: The Paulson Plan is premised upon a public bailout. A better plan is premised upon private recapitalization. Thus, I oppose the Paulson Plan’s raid on the taxpayers; and I will continue fighting to ensure the Wall Street crowd who made this mess pay to clean it up.”
Congressman McCotter is not content to simply criticize the plan on the table; he has drafted a plan of his own, EARN or the "Expedited American Recapitalization - Now" Act:
Expedited American Recapitalization - Now (EARN) Act Proceedings: A sunset bill that makes available to financial institutions a pre-packaged recapitalization (EARN) proceeding in which debt forgiveness is expedited. (This is similar to expedited bankruptcy proceedings. The strike warrant price will determine values.)
Inducement to EARN Proceedings: To induce financial institutions to undergo EARN proceedings, future government recapitalization (if necessary) may not be offered to a financial institution which does not go through an EARN proceeding.
Incentivize Private Recapitalization: If, within a limited one year window (commencing upon this legislation’s enactment into law), a person invests in (i.e., recapitalizes) a financial institution that has undergone an EARN proceeding, this investment over its lifetime is subject to a ZERO capital gains tax rate. If, within the same one year window, a person purchases a toxic asset, this investment over its lifetime is subject to a ZERO capital gains tax rate.
Government Backstop: If no private capital is forthcoming, the government can take a preferred equity stake in an EARN financial institution. No dividends may be paid to any other investor until the taxpayers’ claim is redeemed with appropriate interest. The government shall also hold voting rights, as determined by the percentage of its equity shares owned, in an EARN financial institution only until such time as the taxpayers’ claim is redeemed with appropriate interest. (This addresses CEO salaries and bonuses without permanently vitiating the private sector’s setting of compensation.)
Distressed Homeowner Relief: 5% of all government recapitalization invested in an EARN financial institution must be dedicated to an across-the-board reduction in the face value of “toxic” mortgages. This will help keep people in their homes; stabilize the foreclosure crisis; and begin to stabilize and raise all homeowners’ values.
Non-EARN Financial Institutions: Financial institutions choosing not to participate in an EARN proceeding, may wall off their toxic assets (as determined by the Secretary of the Treasury) which were purchased between December 2003 and August 2007. For these toxic assets, the current mark-to-market rule will be suspended and replaced with a more accurate three year rolling average mark-to-market; and for a fee, insurance of these toxic assets can then be purchased from the federal government. If, within the above referenced one year window a person purchases a toxic asset, this investment over its lifetime is subject to only HALF the capital gains tax rate applicable at present; if the capital gains tax changes, the toxic asset’s purchaser possesses the option, upon alienating the toxic asset, of being taxed at the capital gains rate applicable at the enactment date of this legislation into law.
Market Transparency and Congressional Oversight: To ensure Market Transparency, the Secretary of the Treasury is empowered to examine any and all appropriate financial records at any time of financial institutions and individuals covered under this act; and Congress at any time may request of the Secretary of the Treasury any and all information required to protect the taxpayers’ investment incurred under this act.
End “Too Big To Fail”: Make an express commitment to a future, pro-active regulatory system in which a market share cap provision is imposed upon financial institutions to prevent future taxpayer bailouts and market meltdowns due to entities deemed “too big to fail.”
American Families’ Prosperity Package: Make an express commitment to further American families’ prosperity in a free market future by enacting pro-growth legislation, including, but not limited to: an “all of the above” American energy security plan; income tax and capital gains relief; the repeal of Sarbanes-Oxley; suspend the mark-to-market rule for all financial institutions for six months and replace it with a more accurate three year rolling average mark-to-market; GSE privatization; and dollar stabilization. (See Gingrich and RSC proposals.)
Ultimate Cost to Taxpayers: ZERO!
Bill Perkins, a private, Houston-based venture capitalist placed a $130,000 dollar, full-page ad in the New York Times which consisted only of the following cartoon. Note the demise of Capitalism and Private Enterprise.
Mr. Perkins explains it to Fox Business. Or at least tries to.
"The proposed federal intervention (up to a $1 trillion bailout of distressed assets and bonus-paying firms) is the antithesis of what the competitive markets of capitalism would permit."
[SNIP]
Yet, to cover their corrupting decisions and past complaisance, Washington's major mouthpieces -- from former Federal Reserve Chairman Alan Greenspan and Treasury Secretary Hank Paulson to Senate Banking Committee Chairman Chris Dodd -- now say that unless we trust them with a new round of our scarce resources, the U.S. economic system will collapse. This rhetoric is meant to panic us into accepting a new federal steward of our hard-earned dollars. But when you dissect the palaver, what you see is a bare-knuckled proposal to further centralize federal control over the marketplace of investments and savings. Such a revolutionary move is socialism. It will not simply be a matter of taxing the rich or those with some ability to pay for the purpose of redistributing shelter to the poor. It will represent an institutionalization of financing immoral behavior.
[SNIP]
There may yet be time to stop this debacle, but 'we the people' are going to have to help. Call, fax or e-mail your member of Congress and your Senators. Ditto the White House. Let's demand a free market solution - before it's too late.
