Category Archives: Democrats

Update II: Further Financial Centralization (Budding Bureaucracies)

Bush, Business, Democrats, Economy, Federalism, Law, Regulation

Charles Krauthammer points out that BHO’s financial-reform bill is a move toward a further increase in the overweening powers of the Executive branch, which will now be able to seize a firm it designates as systemically risky. Where was Krauthammer during the Bush administration? It invented the doctrine of an overreaching executive. Still, he is right.

Michele Bachmann sums up the impetus of the bill: privatizing profits; socializing losses. (By the way, Bachmann is infinitely superior in intelligence to Palin who’s only growing more ignorant with notoriety. The more I see of Bachmann, the more impressed I grow with her demeanor and unshakable command of the facts.

Here is The Wall Street Journal’s “Factsheet: Senate Financial-Regulation Bill”

Update I (April 27): As Fox News legal analyst Judge Andrew Napolitano has been pointing out, the bogus lawsuit against Goldman-Sachs, a major donor of Obama and the beneficiary of a bailout, is political theater designed to prepare the public for the passage of enormously intrusive financial regulation.

The Heritage Foundation on “The Dodd Bill:

“Congressional Democrats and the Obama Administration want to create a permanent bailout mechanism all [the] while spouting their rhetoric of getting tough on Wall Street, but if you look at who is already lining up to support their ‘reform’ measure it’s a who’s who of the big banks that have already received the taxpayer bailout the first time.” … “Wall Street supports this measure. Why? Because big investment houses realize they’ll get bailed out and would have less reason to worry about risky behavior.”

“Sen. Chris Dodd (D.-Conn.) crafted the Senate version of so-called ‘Financial Reform’ with the support of the President. The procedure used to date resembles the non-transparent and secretive tactics used to pass ObamaCare. The Senate Banking committee marked up the bill in 22 minutes, with no amendments offered and no debate allowed. …

“There are two specific problems with the Senate approach to ‘reform.'”:

“First, this legislation would create a new $50-billion bailout slush fund controlled by the Federal Deposit Insurance Corporation (FDIC). Very big banks and other ‘eligible financial companies’ would be taxed by the FDIC to build up this fund. As with any tax, though, it’s consumers–you and me–who would eventually pay this levy.

The Obama Administration this weekend requested that the $50 billion pre-funded bailout money be removed from the bill. But according to Foxnews.com, Treasury Secretary Tim Geithner advocated last year that any bailout funding should be addressed post bailout through a tax on big Wall Street firms. If Senate Democrats only take out the $50 billion slush fund and leave the bailout authority intact, then the taxpayers will still be on the hook for any future bailouts.

Another problem with this bill is that it would bail out the creditors of companies and wouldn’t require any creditor to take a loss after a company starts to fail. If the bailout slush fund is tapped, the FDIC would have the power to reimburse creditors. That could allow the FDIC to pay creditors more than they invested (pursuant to Section 210 of the Dodd bill).

Think about that. If creditors know they aren’t likely take a loss, and risk has been eliminated from an investment, its taxpayers who are assuming all the risk. Of course, taxpayers get none of the rewards if the investments pay off–we would simply be on the hook if they fail. Taxpayers could expect no reward for having insured transactions and protected wealthy investors from any risk. The AIG bailout is a great example of this model.”

Update II: BUDDING BUREAUCRACIES. Senate Republicans are, so far, blocking debate, and thus a vote, on The Bill, which makes them look like obstructionists to a moronic populace.

Bloomberg:

“Republicans say the bill would set up a permanent bailout of Wall Street banks and create bureaucracies … Dodd’s legislation would create a consumer financial protection bureau at the Federal Reserve with authority to write rules and enforce them at banks and credit unions with more than $10 billion in assets. … The bill would limit the Fed’s regulatory authority to banks with assets of at least $50 billion, transferring its powers to monitor smaller lenders to other regulators. It would also set up a council of regulators to monitor the economy for systemic risk and ban proprietary trading at U.S. banks.”

What pigs do with power ….

Updated: Regulator ‘Claims Credit For Nascent Economic Recovery’

Barack Obama, Business, Democrats, Economy, Government, Regulation, The State

Obama can boast of job growth for the month of March—162,000— because, from his standpoint, an accretion of the parasitical sector (government) is as good, if not better, than that of the private, productive economy. Laissez faire capitalists understand that the “U.S. Census Bureau’s addition of 48,000 jobs for its once-in-a-decade head count of the U.S. population” will hit the private sector hard. Barack doesn’t.

Note that none of the modest job gains in other industries, respectively, rivals the gains of one government department, the Census Bureau. And sixteen thousand other IRS thugs will be hired to enforce the healthscare bill.

That rising tide of hiring brought relief to some long-suffering sectors of the economy. Construction added 15,000 jobs, the first increase of any kind in the sector since June 2007. Manufacturing also added 17,000, with 2,500 of that gain coming at auto plants and their parts suppliers.
Retailers added nearly 15,000 jobs and leisure and hospitality accounted for 22,000 more jobs.

What interests me about Obama’s blather is not so much that he has declared that the “country has successfully ‘turned the corner,'” but that in response to criticism of his interventionist policies, he “insists the country cannot return to the more conservative hands-off regulatory philosophy traditionally favored by the GOP.”

The US economy is regulated to the hilt; legislators of both parties have placed it in knots of bondage.

Take banking. “For all the talk about deregulation run amok, banking is one of the more heavily regulated sectors in most Western economies. In the US, for instance, banks have numerous regulators, ranging from the federal Reserve System to the Federal Deposit Insurance Funds to a variety of minor offices and state regulators, all acting in concert. Not only did these regulators fail but they egged on the excesses which later exploded. The more consolidated regulatory approach of the UK didn’t seem to fare much better. We’re counting on the regulators to fix the markets but there is very little talk about how to fix [or rather fire] the regulators. [Tyler Cowen, Times Literary Supplement, February 26, 2010]

Peter Schiff sees a bubble in government brewing. In “The Fed’s Last Hurrah,” he writes:

“While the earlier booms at least provided the illusion of prosperity and some fun while they lasted, the government bubble will cripple the economy and deliver widespread misery to the vast majority of Americans.

Of course, there will be winners in the government bubble, at least for a while. As was the case with the stock and real estate bubbles, plenty of money will be made by the well-connected and parasitic classes. Government employees will continue to enjoy pay raises at our expense, as will anyone benefiting from the new wave of subsidies, such as Wall Street investment bankers, financial speculators, and those working in health care or education.

These gains will come at the expense of the taxpayers who foot the bill and the consumers who face higher prices. As government grows, it deprives the private sector of the resources it needs to survive and grow. The result is a lower overall standard of living. Not only are government jobs less productive than private sector jobs, but bureaucratic interference actually makes the remaining private sector jobs less efficient as well.”

Update (April 5): FRED REED RIPS apart the US Managerial State. No one on this site buys the line you hear from Mr. Hannity, and other iconic conservatives, that the US BB (before Barack) was a free country:

“Washington is out of control. It does as it likes, without restraint. It spends American money and American lives to fight remote wars for which it cannot provide a plausible reason. It determines what our children will be taught, who we can hire and fire, to whom we can sell our houses, whether we can defend ourselves, even what names we can call each other. The feds read our email and track the web sites we visit, make us hop around barefoot in airports at the command of surly unaccountable rentacops. They search us at random in train stations without even a pretense of probable cause. We have no influence over them, no way of resisting.

… Washington has learned to insulate itself from interference by the population. Huge impenetrable bureaucracies beyond public control make regulations that amount to laws, spending God knows how much money to do God knows what for the benefit of the interest groups that run the government. These bureaucrats cannot be fired and usually cannot be named. Congress, like the bureaucracies, serves not the United States but the big lobbies.” …

Update II: Fascism Rising (Henry ‘Nostrilitus’ Waxman)

Bush, Business, Democrats, Economy, Fascism, Government, Republicans

A couple of day ago a number of major companies came out with the preliminary assessment of the costs to each of the “Manna From Mount Olympus” bill, namely Obama’s healthscare legislation. The fascist state that America has become responds sternly to economic forecasts that go against the government’s grain. You may be called on to justify yourself if your assessment of your books diverges from the government’s.

“Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, has summoned some of the nation’s top executives to Capitol Hill to defend their assessment,” reports the Washington Examiner.

Waxman wants “the executives to explain themselves at an April 21 hearing before the Energy and Commerce Committee’s investigative subcommittee.”

As Byron York points out, “Waxman’s demands for documents are far-reaching. ‘To assist the Committee with its preparation for the hearing,’ he wrote to Stephenson, ‘we request that you provide the following documents from January 1, 2009, through the present:

“(1) any analyses related to the projected impact of health care reform on AT&T; and (2) any documents, including e-mail messages, sent to or prepared or reviewed by senior company officials related to the projected impact of health care reform on AT&T. We also request an explanation of the accounting methods used by AT&T since 2003 to estimate the financial impact on your company of the 28 percent subsidy for retiree drug coverage and its deductibility or nondeductibility, including the accounting methods used in preparing the cost impact statement released by AT&T this week.”

“Waxman’s request could prove particularly troubling for the companies. The executives will undoubtedly view such documents as confidential, but if they fail to give Waxman everything he wants, they run the risk of subpoenas and threats from the chairman.”

AN enterprise’s freedom of speech, right to privacy, prerogative to disseminate information about its finances and accounting—this government is asserting ITS right to infringe all these and more.

The Republicans had similar witch hunts when in power (which is why I’m perplexed that some conservative commentator are convinced, and keep repeating, that only now, under Obama, have they lost these freedoms). The “Sarbanes-Oxley Act,” signed into law by President Bush, was government’s response to The People hoisting their pitchforks against business. Also known as the Corporate Corruption Bill, it singled out a much-maligned minority for the kind of persecution that, if visited on women, blacks or Jews, would be considered actionable, hate-filled discrimination. Hearings were all the rage at the time too.

Update I (March 30): Related: “Dems fear honest Obamacare accounting”:

Democrats, in their zeal to raise revenues and improve Obamacare’s claimed effect on the federal deficit outlook, took away a tax break these companies needed in order to supply prescription drugs to their retirees. The tax subsidy, itself a government accounting ruse crafted in 2003 by the Republican Bush administration to dissuade corporations from dumping their retiree drug benefit programs on the then-new Medicare Part D, becomes taxable under Obamacare. Corporations are now being reminded of the harsh truth: What Big Government giveth, Big Government taketh away, too.

Update II (March 31): Henry “Nostrilitus” Waxman (thanks for the laugh, Greg):

CBOafs Scores Always Way Off

Debt, Democrats, Economy, Government, Healthcare, Political Economy, Regulation

Has any bill passed by Washington ever come in on or under budget? Of course not, but faith runs eternal among the faithful. Cato Institute’s Michael Cannon has said what I did in my last column, “Heeere’s Health-Scare”: “Ultimately, the CBOafs’ forecast is only as good as their premise, which is faulty” (my version). “The Democrats have required the CBO to adopt some really unrealistic assumptions … even if those projections are accurate, politics gets hold of that program. And people start demanding more out of that program” (Cannon’s).

Here are some facts from a research paper authored by FreedomWorks Foundation:

* “The Medicare Program: When Medicare was instituted in 1965, there was no Congressional Budget Office. Instead, in 1967 House Ways and Means analysts estimated the cost of the program. Medicare, they predicted, would cost $12 billion in 1990. (1) They were wrong—by a staggering factor of 10. The actual spending in 1990 was $110 billion. (2) And Medicare costs continue to skyrocket. Through the first 9 months of 2009, Medicare has cost taxpayers $314 billion and that price tag continues to grow by 10%. (3)

In the case of the Medicare Program, the government estimate was off by over 816%. If the CBO estimate for the Senate health care bill is off by the same percentage, then the price of reform may be as high as $7.74 trillion.”