On re-establishing our Constitution rights…

There must be a sense of urgency if we are to avoid the excesses of the GWB administration in the Obama administration or in administrations yet to come.  Once an office-holder gets power, it is very difficult to reclaim the power and give it back to its rightful owners (“We, the People”).  

It is also clear that Obama will abandon his principles in the name of “getting SOMETHING done.”  This has held true for every controversial issue that has come before us in the last couple of years (and before that when he voted “present” in the IL State Senate).

The only way we can get our rights re-established within the current governmental structure is to enact campaign finance reform in order to shift the power back to the people and seize it from fat-cat Big Business and their special interest groups and lobbyists.  Until we do this, Congress and the Executive Branch will allow them to “pay to play” and will not make decisions that benefit the people.

Campaign Finance Reform is the first and most critical step.

Once that is in place, a healthcare bill can be passed that benefits the people and not the insurance companies, healthcare providers and Big Pharma.

Decisions about how to solve the economy will move back from “welfare for Big Businesses” and the proper restraints and regulations that were eroded since the Reagan years (and even before that) will be re-established.

And, of course, if we re-establish the natural balance between the three branches that the authors of the Constitution intended (and which have worked reasonably well in the past), it stands to reason that our rights and protections will be re-established as well.  All the executive abuses of the past, from torture, rendition and the writ of habeas corpus to Executive Orders and all the provisions in the last few FISA amendments and the Patriot Act will cease to exist in their present form. 

We must acknowledge that “We, the People” do not have to relinquish our constitutional rights and protections in order to be safer.

 

Fear causes us to make bad decisions out of desperation in order to “feel better” or less fearful of our enemies and the potential threats it presents to our country and its citizens.  And what it really accomplishes is to change what is good about our society and form of government based on our fear and desire for safety.  We only have to look in our past to see how we slaughtered Indians by the millions and imprisoned Japanese American citizens in our own concentration camps because we didn’t trust people who didn’t look like us.

And we must pass a rule that amendments that are not germane to a bill cannot be included in any bill.

We also must demand the SCOTUS rule on whether or not an Executive Order is constitutional and binding, particularly if it includes provisions that are unconstitutional (abolishing the writ of habeas corpus, etc.).

And we must clearly establish the Right to Privacy, which will resolve such issues as abortion and homosexual marriage (and, for all practical purposes, many of the wedge issues that have plagues us since 1980).  I believe the Right to Privacy does exist.  If you look at the Bill of Rights, it is quite apparent that our Constitutional framers believed in the “man’s castle” theory which clearly establishes our inherent Right of Privacy.

Anyway, I think we must approach this issue in two ways:

First, get back control over our elected officials, who have reason to fear Big Business and Special Interests because of the enormous cost of running a successful re-election campaign, through passing campaign finance reform.

Second, we must try to educate “We, the People” and make them realize how dangerous it is to set such precedents that shift too much power to either of the three branches and shift power from the People to the government.  We must re-establish the inherent controls and balance between the three branches of government and the unconstitutional shift of far too much government power to the Executive Branch.  Even if we like and trust (or think we do), the guy in office now, we must remember that these precedents, once set, will empower and candidate that occupies these governmental position in the future. 

Unchecked power and unaccountable authority just don’t work, whether we are speaking of individuals or a political party.  We have seen that throughout the ages, and especially since 1980, when the political parties and special interests influenced the general public in becoming more and more polarized.  And that is the real danger. 

A democracy must be “people-oriented” and “people controlled “  Any act or action that contributes to American society by solving societal problems or preventing abuse by a government branch that refuses to acknowledge their accountability to the law of the land and to We, the People, must be effective and results-oriented in order to succeed and achieve the true goals of a democracy.  Every time we allow wedge issues to consume public discourse and further polarize Americans or sit back and watch our inherent constitutional rights and protections “flushed down the toilet” — regardless of any fear that permeates political discourse or public discourse — we move further and further way from the true freedoms that only a democracy can provide.

Abandoning our democratic values in exchange for the delusion that we are safer is the greatest “win” the terrorists could have hoped for…. and we gave this to them out of fear.

The GWB administration was masterful when it came to fear-mongering.  They proved how instilling fear in the general population could successfully empower an unhealthy, unchecked Executive Branch who believed themselves to be above the law.  And we also see how the country was bankrupted by the GWB administration to the point where the People are now financing with their own tax dollars poorly run companies with incompetent or criminal executive management; who deserve to be punished, not rewarded with multimillion-dollar executive bonuses BEFORE they have paid the American taxpayers back for their bailout money… These are the same executives that routinely and for a significant period of time made bad management decisions and were even criminally negligent to the point that their actions consist of a criminal breach of their fiduciary responsibilities.  And then we allow them their million-dollar bonuses while we are punished for their crime by having to carry the load of an out-of-control national debt.

Campaign Finance Reform is the first step

Without it, the Constitution will not be restored to its original intent, real healthcare that first protects the best interests of the People and not Big Business, Big Pharma and other Special Interest will never pass, and Big Business, the NRA and Special Interests will continue to have improper, excessive access to our elected officials, which results in the power to secretly write bills that benefit them or their industry.

Learning from history: Regulation works

“Those who do not learn from history are doomed to repeat it.” –  George Santayana quotes (Spanish born American Philosopher, Poet and Humanist who made important contributions to aesthetics, speculative philosophy and literary criticism. 1863-1952)

 

This housing market debacle that has occurred under George W. Bush’s watch can be traced back to many of the same causes as the Savings & Loan debacle during Reagan’s watch on October 1987:  it’s about how deregulation sets the market up for failure.

 

This problem goes back to Carter.  And every administration and every Congress since then has been complicit in this mess.  The reason they waited until it was too late to put it off is that they are ALL in bed with the financial contributors.  This year, Dodd, our Senate Banking Committee chair, got the most from the investment houses, Obama was second. (www.opensecrets.org).  But, none of them are blameless.  James A. “Jim” Johnson, a close friend of Richard Daley and the Chicago Daley political machine, Franklin Raines, , Tim Howard, Jamie Gorelick and Penny Pritzker are Obama advisors, and McCain had Rick Davis as his campaign manager.

 

“In 1990, [Jim] Johnson [Chairman and CEO, 1991-1998) went to work for the Federal National Mortgage Association (Fannie Mae) and quickly became its $5 million-a-year chairman. His compensation rose to a reported $21 million by his final year, 1998....

 

When he left his job at Fannie Mae, which long has had a reputation as a cushy landing spot for the political class in Washington, he was serenaded by 16 members of the Benson High band, which had been flown to D.C. at Fannie Mae's expense. He also received a number of perks, including a $600,000 annual consulting fee….

 

It should be noted that Johnson got out of Fannie Mae while the getting was good. Since his leaving, the massive, quasi-public home mortgage organization has been buffeted by negative headlines. Accounting scandals, dating back to Johnson's era, have been followed by recent news that Fannie Mae has lost more than $3 billion in the housing slump.”  (http://www.minnpost.com/stories/2008/06/03/2078/obama_turns_to_trusted_political_insider_jim_johnson_for_key_campaign_role)

 

A news release, dated 12/18/2006, stated that OFHEO had filed a Notice of Charges against former Chairman and CEO Franklin Raines, Vice Chairman and Chief Financial Office Tim Howard and former Senior Vice President and Controller Leanne G. Spencer, which was ultimately settled.  In that Notice, Office of Federal Enterprise Housing Oversight (OFHEO) Director James B. Lockhart stated,

 

The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over 20 accounting principles and misleading the regulator and the public.  The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.The conduct cost the Enterprise and shareholders many billions of dollars and damaged the public trust.  http://www.ofheo.gov/media/pdf/RainesNOC121806.pdf

 

Let’s examine the relationships that two of those mentioned have with Obama:

 

“Franklin Raines, Chairman and CEO of the Federal National Mortgage Association (Fannie Mae) from 1999-2004, is the individual most responsible for the subprime mortgage crisis. It was on Mr. Raines' watch that Fannie Mae went bankrupt.

 

He was accused of manipulating earnings statements so he could be paid bonuses to which he was not entitled.  He received a golden parachute valued at $240M, court ordered him to return $50M, leaving $190M, at least $20M of that sum was now worthless stock.

 

Of Raines' $91 million in compensation between 1998 and 2003, more than $84 million was tied to earnings per share targets and faulty accounting, OFHEO said in 2006.:  (http://www.reuters.com/article/ousiv/idUSN1835681920080419?pageNumber=2&virtualBrandChannel=0)

 

 

Tim Howard was the Vice Chairman and Chief Financial Officer of Fannie Mae. Howard "was a strong internal proponent of using accounting strategies that would ensure a "stable pattern of earnings" at Fannie. In everyday English - he was cooking the books.  The Government Investigation determined that, "Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae,"

 

On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant's income statement to achieve management pay bonuses. Investigations by federal regulators and the company's board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses. Raines and Howard resigned under pressure in late 2004.  Howard's Golden Parachute was estimated at $20 Million, of which he had to return $5.4 million.  (http://www.reuters.com/article/ousiv/idUSN1835681920080419).

 

 

Mr. Johnson and Mr. Raines aren't the only figures in the subprime mortgage scandal to be connected to the Obama campaign. Jamie Gorelick, rumored to be an attorney general candidate in an Obama administration, was vice chairman of Fannie Mae from 1997 to 2003 [and was the former Deputy Attorney General in the Clinton administration]. Penny Pritzker, Mr. Obama’s national finance chairman, has been described as “the Michael Milken of the subprime mortgage crisis” for her pioneering of the packaging of bad loans with good ones at her now defunct Superior Bank in suburban Chicago.”  (http://www.realclearpolitics.com/articles/2008/09/how_close_are_raines_and_obama.html)

 

Penny Pritzker, a billionaire  (Hyatt hotel chain and the Marmon Group industrial conglomerate. (Forbes Lists 2005), engaged in predatory lending “after the Pritzkers’ bank acquired its wholesale mortgage organization division, Alliance Funding, in December 1992.”  (http://gdaeman.blogspot.com/2008/02/who-is-penny-pritzker-and-why-is-she.html, http://www.thenation.com/bletters/20080211/fraser).

 

According to the Encyclopedia Judaica, the Obama campaign’s national finance chair, Pritzker “served as chairman of the Superior Bank from 1989 to 1994, but the savings and loan institution collapsed” in July 2001. Created at the end of 1988 as the successor bank to the failed Lyons Savings Bank, the Oakbrook Terrace/Hinsdale, Illinois-based Superior Bank was 50 percent owned by Chicago’s billionaire Pritzker family. Yet according to an October 16, 2001, statement before the US Senate Committee on Banking, Housing and Urban Affairs by Ely & Company Inc. President Bert Ely, the Pritzker family’s Superior Bank “started life with enormous tax benefits and a substantial amount of FSLIC-guaranteed assets under a FSLIC Assistance agreement.” In a December 2002 Chicago magazine article, “Tremors In The Empire,” Shane Tritsch noted, for instance, that for investing $42.5 million in the failed Lyons Savings Bank before it was reopened as Superior Bank, the Pritzkers and their business partner received an estimated $645 million in federal tax credits and loan guarantees; and “by one estimate, it would have cost the government $200 million less simply to shut Lyons down.”

 

But according to Ely’s October 16, 2001, statement, “Superior’s trick, or business plan” under Penny Prtizker’s chairmanship was apparently “to concentrate on subprimelending, principally on home mortgages, but for a while in subprime auto lending, too,” after the Pritzkers’ bank acquired its wholesale mortgage organization division, Alliance Funding, in December 1992.

With a business loss estimate of between $350 million and $1 billion, the 2001 failure of the Pritzkers’ Superior Bank represented the largest US-insured deposition institution to fall between 1992 and 2001. But according to a February 7, 2002, report by FDIC Inspector General Gaston Gianni Jr., “the failure of Superior Bank was directly attributable to the Bank’s Board of Directors and executives ignoring sound risk management principles.”  (http://www.thenation.com/bletters/20080211/fraser)  

 

And then there’s ACORN.  Obama’s direct involvement with ACORN, who intimidated banks into providing loans to those with bad credit, included serving  on the board of the Woods Fund which provided money for ACORN’s activities.  Obama also trained “activists” on behalf of Madeline Talbot, who spearheaded the drive to pressure banks into providing high risk loans.

 

A rundown:

·         Madeline Talbot, leader at Chicago ACORN, enlists Obama (between college & law school) to train her staff.

·         ACORN requests Obama as legal representation in “motor voter” case.

·         Obama (post law school) in partnership with ACORN organizes “Project Vote.”

·         Obama enlists ACORN volunteers for State Senate, (failed) Congress, US Senate campaigns.

·         Obama hires Daley-team to run State Senate election, kicks other 4 contenders (including incumbent) off the ballot, and wins by running unopposed (How did Obama’s legal team invalidate thousands of signatures? See article & video for more).

·         Obama directs millions in grants to ACORN

(http://www.dingonation.com/politics/race-redistribution-and-the-bully-pulpit)

 

 

“Senator John McCain’s campaign manager [Rick Davis] was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say. 

 

… several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000.”  (http://www.nytimes.com/2008/09/22/us/politics/22mccain.html?_r=2&oref=slogin&ref=politics&pagewanted=print&oref=slogin)

 

As long as times were good, nobody complained too hard because you “don’t fix what ain’t broke.” (Will Rogers)   The markets were great, the bubble hadn’t burst yet.  But, then the bubble burst.

 

This is not the first time de-regulated markets have posed a problem.  The Glass-Steagall Act of 1933 was passed to protect homeowners. 

 

“Bad Government Policies

Economist Robert Kuttner has criticized the repeal of the Glass-Steagall Act as contributing to the subprime meltdown.  A taxpayer-funded government bailout related to mortgages during the Savings and Loan crisis may have created a moral hazard and acted as encouragement to lenders to make similar higher risk loans.”  (Wiki — http://en.wikipedia.org/wiki/Subprime_mortgage_crisis)

 

Banking deregulation started in earnest during the Carter admin in 1978.  Interest rate ceilings on deposits were phased out in the early 1980s, during Reagan’s watch.  Next came the Commodities Futures Modernization Act of 2000, HR.5660, also passed by a Republican Congress and signed by Clinton.

 

“Additionally, there is debate among economists regarding the effect of the Community Reinvestment Act, with detractors claiming it encourages lending to uncreditworthy consumers and defenders claiming a thirty year history of lending without increased risk.  Amendments to the CRA in the mid-1990s, dramatically raised the amount of home loans to otherwise unqualified low-income borrowers and also allowed for the first time the securitization of CRA-regulated loans containing subprime mortgages.

 

Some have argued that, despite attempts by various U.S. states to prevent the growth of a secondary market in repackaged predatory loans, the Treasury Department’s Office of the Comptroller of the Currency, at the insistence of national banks, struck down such attempts as violations of Federal banking laws. 

 

The U.S. Department of Housing and Urban Development’s mortgage policies fueled the trend towards issuing risky loans.  Like the second link says, HUD and the Community Reinvestment Act are major culprits. After their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of “affordable housing.” They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. They greatly grew the subprime mortgage market, leading to a housing bubble and its subsequent collapse. 

 

Among banks and the regulatory agencies, there was a consensus that data collection, recordkeeping, and reporting requirements imposed a heavy burden on small community institutions. As a result of a 2002 review of the CRA regulations, and revision of an initial Federal Deposit Insurance Corporation (FDIC) proposal following a public commenting period that was largely negative, the FDIC, Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB), made substantive changes to the implementation of regulations for the CRA for banks (not thrifts).

 

Previously, all institutions over $250 million in assets were subject to a three-part CRA test that covered lending (including community development loans), qualified investments, and services (including community development services) to their assessment areas. Institutions less than $250 million were subject only to a lending test.

 

However, as of September 1, 2005, only those institutions with more than $1 billion in assets were subject to the three-part test. Institutions below $250 million remain subject to only a lending test, and a new CRA test was created for institutions with assets between $250 million and $1 billion. This latter category, referred to as Intermediate Small Banks, is subject to the same lending test to which institutions under $250 million were subject, along with a new combined community development test that covers community development loans, qualified investments, and community development services. The $250 million and $1 billion asset thresholds also were indexed to the consumer price index and could change annually. Thus, all institutions remain subject to the CRA test. These substantive changes were intended to be a compromise between changes advocated by banks and community groups.

 

However, the changes were not received positively by all community groups. Changes to tests conducted on the Intermediate Small category were viewed by some as decreasing the institutions’ obligations to meet lending requirements of low- and moderate-income households. Racial inequities in mortgage acceptance rates (as reported by Inner City Press, the National Community Reinvestment Coalition, ACORN and other groups) are cited as a primary reason to maintain or even increase the scope of the CRA.”  (Wiki — http://en.wikipedia.org/wiki/Community_Reinvestment_Act)

 

The Gramm-Leach-Bliley Act, passed in1999, and the Commodities Futures Modernization Act, passed in 2000 “broke down the firewalls between Wall Street and commercial banks and banned regulation of credit default swaps, an insurance-like product bought by financial services companies to cover their risky subprime mortgage investments.”  (http://www.politico.com/news/stories/0908/13683.html)  

 

“The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub.L. 106-102, 113 Stat. 1338, enacted 1999-11-12, is an Act of the United States Congress which repealed part of the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services.”  (Wiki — http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act)

 

American International Group, rescued by the Federal Reserve on Tuesday [September 16, 2008] is one of the biggest sellers of these swaps.”  Barney Frank commented to reporters that he had been sitting on a bill (S.190, then S.1100 refiled), tabling it until after the presidential election. Clinton had tried to get legislation through during his administration that modified some of this.  Even Bush tried to do the same.  McCain even raised the cry.

 

Relaxation of geographical restrictions on bank expansion proceeded historically, and this resulted in the history of state-level regulation being completely abandoned. Over a period of 20 years, Glass-Steagall was pecked at and undermined and weakened. It was finally killed altogether in 1999 with the Graham-Leach-Bliley Financial Services Modernization Act of 1999, signed by Clinton, but passed by a Republican-dominated Congress.

 

Triggering the financial implosion on Wall Street were the problems at Fannie Mae and Freddie Mac, which had its legislative roots in the Congressional Black Caucus.  The concept for these institutions was a good one — to break down the barriers of institutionalized racism in the financial market.  But the implementation and de-regulation made for a situation is which widespread fraud and abuse and far-too-relaxed lending practices created an unstable situation.  These firms were not properly leveraged, and their impending collapse should have been easy to predict.  These firms, fostered lax lending practices and covered up their own financial deficiencies.  And these two institutions have their tentacles in the 2008 presidential campaign in the forms of Jim Johnson, Franklin Raines, Rick Davis, Jamie Gorelick and Penny Pritzker.

 

Although I am not a fan of GWB, it is only fair to say that, going back to the beginning of his administration, President Bush warned of the problems at these institutions and the consequences if Congress did not bring them under control. Seventeen times, Bush publicly called for reform of both institutions. But Democrats and Republicans in Congress ignored the warnings and denied there were any problems. What follows is an administration chronology of efforts to achieve reform:

 

At the beginning of 2005, a bill was introduced by Chuck Hagel to deal with the need for regulating Fannie and Freddie, among other investment banks. John McCain was a cosponsor: (http://uppitywoman08.wordpress.com/2008/09/21/john-mccains-fannie-maefreddie-mac-warnings-may-2006/).  And Barney Frank (http://www.house.gov/apps/list/press/financialsvcs_dem/press092308.shtml) and Chuck Dodd had a bill in the last Congress that was filed as S.190 and refiled as S.1100 that they have been sitting on until after the presidential election was over, only the economy wouldn’t wait

 

As with most idealistic theories, Adam Smith and his concept of a free market works very well in a laboratory setting, where all the factors are carefully controlled, much like any utopian philosophy.  But in real life, with real people who have real greed and real problems with ethical behavior, it simply does not work.  It works no better than its polar extreme socialism, which does not motivate people to work and to strive for excellence.  That’s why we need regulation of the markets.  Because markets deal with real people and real temptation and real greed must be controlled.

 

The next problem that is happening today is both a symptom of deregulation and a cause of the resulting debacle, and that is lack of transparency.  It is a particularly strong trait of this administration.  And this administration has set the tone for the entire country, especially the business world.  Lack of transparency makes it impossible for real oversight or regulation to occur.  People who hide things usually have something to hide.  We have found this to be true of this administration, and now we see the same trait is both a cause and a symptom of this deregulated market and its result:  the biggest market failure requiring the biggest bailout in history.

 

The same applies to our other regulatory agencies which have been decimated during the Bush administration.  We need environmental, labor and consumer protection regulation both at home and as it applies to our imports and trade agreements.

 

We know from our own experience as children that rules work.  Rules that are reasonable and that are fairly and consistently enforced make society work for everyone.  It also applies to markets and to business.

 

So, how do we fix it?  The administration is pressuring Congress to move quickly.  But I hope Congress realizes that there is a difference between moving quickly (and knowing what you’re doing) and moving irresponsibly and imprudently.  Rash behavior will only complicate the existing mess and create an even bigger mess.  And U.S. Treasury Secretary Hank Paulson’s “Chicken Little” presentation before the Senate Banking Committee did not inspire confidence.

 

When you are reacting, you are not in control.  We must get control of these markets, and that requires thoughtful, deliberate action that requires controls and oversight tools to be included in the pending legislation, which, in its current form, is a prescription for a larger disaster, but it basically writes a blank check to Secretary Paulson, who helped oversee the making of this mess in the first place, and this, plus his $500M fortune earned by the very excesses and abuses that have cause this market to fail, makes him an unregulated and uncontrolled God of the market economy.  Paulson was Chairman and CEO of Goldman Sachs  since the firm’s initial public offering in 1999, and this tends to further erode my confidence in his ability to objectively oversee this recovery and select firms to bail out.  All this leads me to believe that this legislation in its current for is a prescription for disaster.

 

There are also some punitive actions that must be included, not the least of which is that the golden parachutes of the executives who got their company in this mess should not be permitted.  And, most of all, there must be provisions within this deal that protects the American taxpayers in such a way that the funds they are lending these institutions are recoverable, at least in part.  Otherwise, we will be encouraging the same behavior to happen again.  If Uncle Sam bails you out every time you screw up, then why should you change your behavior?

 

One of the most disturbing aspects of this bailout legislation in its first incarnation is that it provides for American taxpayers to bail out foreign firms that had business transactions in the United States.  Since we are in a global economy, shouldn’t the entire globe — any nation that was involved with these transactions — be participating in the pain?  After all, it is their firms who did not observe good lending practices when buying these instruments.  Why should the American taxpayers be held holding the bag for any of it?  There must be some real controls and deliberation on bailing out a foreign-owned institution.  What do we do if we can’t recover our investment in bad paper?  Invade the country where the firms originates?  There is much about this bailout that gives me pause.

 

The American taxpayers will be experiencing significant pain in this deal.  They are taking on, with the recent deals already done, over $1.3T in bad debt that may not be recoverable.  Remember, all the wonderful plans for healthcare, education and many other factors have been flushed down the toilet once this deal is signed.  There will be no money for any of those programs.

 

And if we are willing to take over the banking industry, we must also take measures to control the rising costs of commodities that has already occurred and will continue to occur with investors moving their money to this market.  Just today oil went up $25/barrel.  And rising food prices are already increasing starvation in third-world countries.  The American taxpayer must have some protection with temporary price controls.  Otherwise, other markets will start to fail as rising costs put small businesses out of business.  And the next problem will be all the other industries that have been hard hit during this economic downturn.  Who do we bail out next?  The auto industry?

 

The Commodity Futures Modernization Act of 2000 or CFMA (H.R. 5660 and S.3283) repealed the Shad-Johnson jurisdictional accord, which had banned single stock futures in 1982. The legislation also provided certainty that products offered by banking institutions would not be regulated as futures contracts. This act was incorporated by reference into HR.4577 (see below). The legislation thus became law as a part of HR.4577 – Public Law 106–554, §1(a)(5) signed by Bill Clinton December 21, 2000….

 

The Commodity Futures Modernization Act of 2000 has received criticism for the so-called “Enron Loophole,” 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The “loophole” was drafted by Enron Lobbyists working with Senator Phil Gramm [one of McCain’s financial advisors] seeking a deregulated atmosphere for their new experiment, “Enron On-line.” 

 

Several Democratic Legislators introduced legislation to close the loophole from 2000-2006, but were unsuccessful.

 

In September 2007, Senator Carl Levin (D-MI) introduced Senate Bill S.2058 to specifically close the “Enron Loophole.”  This bill was later attached to H.R.6124, the Food, Conservation, and Energy Act of 2008, aka “The 2008 Farm Bill”. President Bush vetoed the bill, but was overridden by both the House and Senate, and on June 18th, 2008, the bill was enacted into law.  One specific reason behind its introduction was to address the record high oil prices of the 2000s energy crisis. Since it was enacted, average gas prices of regular unleaded gasoline in the U.S. have dropped $0.357, from their record high of $4.114 on 7/17/2008 to an average of $3.757 as of 09/21/2008.

 

The prohibition on single-stock futures and narrow-based indices that had been in effect until the passage of this act was known as the Shad-Johnson Accord because it was first announced in 1982, as part of a jurisdictional pact between John S.R. Shad, then chairman of the U.S. Securities and Exchange Commission and Phil Johnson, then chairman of the Commodity Futures Trading Commission. 

 

The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like mortgage backed securities, necessitated the government bailout of insurer A.I.G.  (Wiki – http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000)

 

Next, if we protect the investors in these institutions, we must also take measures to protect the American taxpayers and the good homeowners who are struggling to pay their mortgages.  I suggest that all homeowners be allowed to adjust their loans to current market value and refinance with fixed rate loans based on that value since the market has devalued their property so greatly.  This strategy worked well during the Great Depression recovery.  In fact, most banks following this practice made money.  Keep these good homeowners who are paying their mortgages in their homes.

 

This crisis could have been averted by practicing reasonable regulation and oversight.  The market, big business and our government failed us on every level.

 

“Ours is a system of corporate socialism, where companies capitalize their profits and socialize their losses…in effect, they tax you for their accidents, bungling, boondoggles, and mismanagement, just like a government. We should be able to dis-elect them.” — Ralph Nader

 

But we must also include our own culpability in this problem.  Many people became speculators during the housing bubble.  They were speculating on the fact that the market would be good and the value of the investment homes would increase so they could sell them at a profit.  And then there were the folks living well above their means who entered into interest-only payments with a big balloon at the end of three- or five-year period, etc., living at the edge of their income and banking on their ability to sell their home for the balloon price or better, then doing it all over again with a new house.  The market failed, the value of the house dropped, and they had no savings to cover the balloon, so they lost their home and ruined their credit.

 

And one final note: The administration’s view is that they are bailing out the “market,” not just a few key firms.  But the greatest beneficiaries ARE the few key firms.  Granted, anyone who has investments, whether it be stock, money market accounts, 401Ks or other retirement or savings vehicles, and anyone who needs credit (especially businesses) will be impacted by this failure.  But there must be some real controls and an objective bipartisan oversight – a deliberative body who decides on what actions should be taken and with which firm.

 

So, here we are again.  Will we learn from history this time?  Will Congress have the balls to face this crisis without giving into the panic-atmosphere that the administration has created to push this bill through without the necessary controls and oversight?  We shall see.  But, whatever, the outcome, we know the American taxpayers will get stuck with the bill.  And, although life is not fair, this is particularly unfair, because it has to do with unbridled greed and mismanagement of private industry due to our elected officials rolling over and playing dead when deregulating the markets and then failing to perform their oversight duties.

 

There is a record of legislation going back to the Clinton administration that addressed this problem, but could not get passed.  The largest contributors in all the campaigns came from these same failed firms.  If that does not wake us up to the need to get money and corporations out of our political campaigns, I don’t know what will.  It’s our fault, too, because we did not demand better from our government.

 

And then there were the honest folks who dealt with predatory lenders — fraudulent real estate brokers, mortgage brokers, etc., that were encouraged to enter into mortgages with variable interest rates or graduated interest rates and hidden costs that caused them to be unable to pay their mortgage.  These real estate brokers and mortgage brokers that falsely represented to their clients their ability to afford these homes, and fraudulently submitted false information about the client’s income or down payment or the value of the home in an effort to put the deal through.  Then they turned around and sold this bad paper to other investment firms.  And the homeowners are left with an unmanagement mortgage payment that they can ill afford or a home beyond their means when they were told they could afford it.  These conspirators must be brought to justice.

 

“Capitalism will always survive in the United States as long as the government is willing to use socialism to bail it out.” — Ralph Nader

 

Bibliography

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

http://en.wikipedia.org/wiki/Glass-Steagall_Act

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

http://www.house.gov/apps/list/press/financialsvcs_dem/press092308.shtml

http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

http://www.politico.com/news/stories/0908/13683.html

http://www.newsmax.com/kessler/gse_financial_timeline/2008/09/22/133234.html

http://uppitywoman08.wordpress.com/2008/09/21/john-mccains-fannie-maefreddie-mac-warnings-may-2006/

http://www.ofheo.gov/about.aspx?Nav=73

http://www.cbsnews.com/stories/2008/09/24/politics/washingtonpost/main4473574.shtml

http://falkenblog.blogspot.com/2008/06/fannie-mae-ex-ceo-ousted-from-obamas.html

http://news.aol.com/political-machine/2008/09/20/ex-fannie-ceo-raines-not-obama-advisor/

http://www.nysun.com/blogs/latest-politics/2008/09/fannie-mae-slips-from-obama-litany.html

http://seattletimes.nwsource.com/html/businesstechnology/2003023671_fannie28.html?syndication=rss

http://phoenix.bizjournals.com/phoenix/stories/2008/09/15/daily81.html

http://www.cftc.gov/files/ogc/ogchr5660.pdf

http://www.allbusiness.com/finance-insurance/credit-intermediation-related-activities/577783-1.html?yahss=114-2974554-577783&siap=1

http://www.fdic.gov/bank/analytical/banking/2004nov/article1/

http://www.ecs-limited.com/download/Challenges%20facing%20Banking%20Industry%20in%20India.pdf

http://fic.wharton.upenn.edu/fic/papers/02/0239.pdf

http://schneiderview.blogspot.com/2008/09/those-who-do-not-learn-from-history-are.html

 

On the intimidation of delegates and the “rigged” roll call vote

The level of disrespect for Hillary, specifically, and the Clintons, in general — not to mention their supporters — has been overt and embarrassing at this convention.  Unfortunately, this has been the style of the true Obama — the intimidating, bullying, disrespectful, power-crazed man — and his mentor, Howard Dean through his DFA, throughout the primary season.

The tactics of GWB in the 2004 election — to isolate and confine protestors and demonstrators to an area off-site and away from the MSM coverage, is another troubling tactic.  Obama and Dean have learned their Rovian tactical lessons well and have incorporated the Rove playbook in this election — a fact which concerns and troubles many loyal, life-long Democrats.  And which, amusingly, does not reflect the “new kind of politics” that Americans assume Obama is referring to in his eloquent, flowery speeches when they sit and listen to him pontificate on the corruption of Washington, scoffing at experience as “Washington trying to boil all the hope out of him.”

Well, I must admit that I had the audacity to hope for something more than an empty suit with a big, however eloquent, mouthpiece.

I am a proud PUMA Democrat and supporter of Senator Hillary Rodham Clinton. I joined PUMA right after the RBC meeting, when it became evident that the “fix” was in and the party was not going to play fair. PUMAs are loyal, “real” Democrats that espouse traditional Democratic Party values and don’t agree with what is going on in their party right now. Some will vote for McCain (I won’t). Some may vote for Obama. Some will vote for Nader or another 3rd party candidate, and some will only vote for down-ticket Dems. I will definitely vote for down-ticket Dems. I am and will always be a Democrat.

This Gestapo-like intimidation of delegates and disrespect to political opponents is not where it ends. The “troll patrol” mission of search and destroy, trying to find out where DNC PartyBuilder bloggers blog on other sites and who they are reveals how deep the insecurity is in the Obama camp.

You see these dictators on their pedestals, surrounded by the bayonets of their soldiers and the truncheons of their police. Yet in their hearts there is unspoken – unspeakable! – fear. They are afraid of words and thoughts! Words spoken abroad, thoughts stirring at home, all the more powerful because they are forbidden. These terrify them. A little mouse – a little tiny mouse! -of thought appears in the room, and even the mightiest potentates are thrown into panic. — Winston Churchill

That’s why Obama failed the “3 a.m.” test when Putin invading Georgia — his fear of making a decision, a commitment. Ted Kennedy once told Obama he needed to run for president before he had a [voting] record to run against. He took that advice to heart, and consequently has avoided making controversial votes ever since. He fears that he might have to run with something besides a “present” vote in the IL State Senate or his complete absence for the vote on Iran in the U.S. Senate — the very kind of vote he so castigated Hillary for on Iraq. His votes on abortion in the IL State Senate have come back to haunt him, and watching him dance around the issue with his swift tongue has been amusing, in some respects, but disheartening in others. His hubris and inexperience and lack of judgment on substantial issues became very evident. And nothing his propaganda machine did or could conceivably do could create a convincing illusion that he was more than an inexperienced man with a tepid, impotent, ineffective response to a real, serious national security threat.

Obama’s solution? Choose a man who had 36 years in Washington (“a new kind of politics” and “change” the way Washington does business?) and who voted FOR the Iraq resolution, just like Hillary.

Obama’s response to critics who supported Hillary? To give Hillary the virtual finger by releasing his VP choice text message at 3 a.m. — the ultimate in immature, sophomoric insults to a lady who has done nothing but try her best to help him.

The disdain in his and his campaign’s remarks toward Hillary and the disparaging comments toward her supporters has done nothing to unify the party, it has divided it. And it is Obama that has done this (or his campaign and supporters on his behalf).

Censors tend to do what only psychotics do: they confuse reality with illusion. — David Cronenberg

The DNC PartyBuilder (PB) blog apparently has an unpublished list of accepted sources and banned sources — no one I know can tell you where the list is, but it must exist, because the Fist-bump Gang has referred to it numerous times. Who is the Fist-bump Gang? A small group of obsessive Obamabots that are dedicated to rooting out all dissenters and those who are not enthusiastically drinking the “Yes we can!” Kool-aid.

If you publish or excerpt from one of the banned sources that shall remain nameless to all but the Fist-bump Gang, you yourself are labeled a troll, a Republican, an Operation Chaos operative or worse, and a campaign against you ensues. Eventually, you are banned from the DNC PartyBuilder site. No dissent is allowed. My IP address or e-mail address was permanently banned (I cannot get approval to blog or write comments with a different Yahoo address, etc.) for publishing an article from the LA Times about Chris Matthews misogynist behavior this election season. If you read their comments about those of us who have been banned, you would think we had been filthy-mouthed, attacking, smearing “trolls” who had nothing substantive to say. The reality is that they are describing themselves, not us.

Women’s rights was and is a very unpopular issue with Obama supporters, particularly the Fist-bump Gang, at the PB blog. Reminds them too much of the primary season and Hillary’s ability to surmount incredible odds in the mainstream media (MSM). In fact, the Obamabots were outraged and fought mightily against having women’s rights as a topic of the Friday Night Forum on PB, even after we had gay rights and civil rights. This went on for about a month. Apparently women don’t warrant the same consideration. And that’s a good part of the problem overall in the Obama/Dean/DFA-controlled DNC, actually.

You have not converted a man because you have silenced him. — John Morley

And what these “Yes we can!” fist-bumping Kool-aid drinkers do accomplish in trying to shout down or shut our dissenters is to create an enemy where none may have existed in the first place. That is absolutely true of me. Resorting to calling me and other Hillary supporters a “bitter” whiner or harridan because my candidate lost an unfair election is based on their inability to see the real, substantive issue here. Where is our party going? And what happened to the core values that our party used to represent? Instead of fighting disenfranchisement, we use it as an election tactic. Instead of being the voice of the people, we are substituting delegates who support the candidate of our choice instead of the candidate the people voted for.

Censors tend to do what only psychotics do: they confuse reality with illusion. — David Cronenberg

The faulty assumption is that the Obama propagandists can cover up the truth with their lies if they just repeat it loud enough and long enough – a tactic GWB and Rove have mastered. They have illusions of gradeur and the self-delusions of a false narrative. Like GWB, they are convinced that the problem is not that they are wrong — it’s not the substance of the message itself, but that they are not properly “controlling” it. It’s a PR problem, not a truth or logic problem. And that is the problem.

And an even bigger problem is that the Obama campaign and the DNC are using the MSM as their personal mouthpiece with the cooperation of the MSM. Rather than aggressively and skeptically questioning the propaganda, the MSM is broadcasting their propaganda for them, unquestioning and without any vetting or sourcing. Watching Chris Matthews and Keith Olbermann anchoring at the convention site for MSNBC, I thought I was watching a DNC-sponsored infomercial piece — certainly not the days of Walter Cronkite or Huntley-Brinkley, much less Edward R. Murrow, who Olbermann has arrogantly stolen his sign-off from. This is what we get for letting corporations control our news media — the best marketing tool money can buy. News by focus groups.

Instead of Obama, his campaign and his supporters making efforts to build relationships with disaffected Dems (primarily Hillary supporters), these guys are trying to alienate them further. This has become the SOP on the DNC PB blog. And it is creating further division, not less.

I remember as a business manager, once sitting in a PR seminar where the instructor made the comment that, when your customer has a bad experience with any of your employees, they aren’t mad at that particular employee, they’re mad at the whole company. This is the impact that these “troll patroling” Fist-bump gang-bangers are having on Obama’s candidacy.

I really tried to get on board the “Yes we can!” Kool-aid train after Hillary conceded. I donated to Obama (not much). I created a profile on his website. I posted a few blogs. But I was constantly attacked by the Fist-bump Gang on the DNC site, along with other Hillary supporters (and that was before they realized I had joined PUMA). For those of you reading this comment who have participated in these type of search and destroy missions, there is a quote that is worth thinking about:

One measure of leadership is the caliber of people who choose to follow you. — Dennis A. Peer

And you Fist-bump Gang-bangers — you DNC troll patrolers — should ask yourselves how many votes have you LOST for Obama today or up until now. It may be more than you realize. I know of dozens of people who have been banned or attacked mercislessly by the Fist-bump Gang who would most likely have voted for Obama had it not been for the nasty, divisive tactics of his supporters. At first, we did not blame Obama, but when it continued and worsened upon Obama’s moderator taking over the blog, it became clear it was sanctioned by Obama and an accepted SOP for his campaign. The real concern is will this be the way he governs as well?

If you don’t know what I am talking about, please check out my WordPress blog site (http://lauraschneider.wordpress.com/ ) or the new political blog site that is open to all parties and all candidates’ supporters (http://www.2008election-forum.com). Suffice it to say that the caliber of the Obama supporters I have encountered on the DNC PB blog does not speak well for Obama.

Interestingly enough, these same “troll patrollers” who are so obsessed with cleansing the blog of less enthusiastic Dems are the ones who also admit to patrolling Republican sites and creating dissent and chaos there. So, they are guilty of the very thing on other sites that they accuse us of on the DNC site. It has been my experience that people who are not trusting are usually not trustworthy. Why? Because they expect you to do to them what they would do to you under the same circumstances. They see themselves in the mirror of the eyes of others.

Obama’s supporters have convinced me that he is not capable of leading this country. Why? If he intends the intimidation and censorship and obsession with “controlling the message” to the point where other ideas cannot be entertained in our party, then he is too power-crazed and corrupt to lead our country. If he is eithe runaware or too impotent to influence his supporters to embrace his message of a “new kind of politics” in reality, not just in hot air, then he is too weak to lead our country. Either way, it does not bode well for Obama, or for us as Democrats.

Either way, he fails the basic test of a leader:

The first responsibility of a leader is to DEFINE REALITY [not obscure it]. The last is to say thank you. In between, the leader is a servant. — Max De Pree

Obama is committed to obscuring reality, not clearly defining it. What is he hiding? His hubris and unabridged lust for power. He will compromise any principle, do anything to get where he wants to go. If that means throwing his grandmother, his minister and our 4th amendment rights under the bus, so be it. Environment? Not a problem, uncer the bus it goes if the polls indicate it will get him a vote or two.

And what has Hillary done? Everything she can to try to unify the party and sell Obama to us. But that is Obama’s job. And Hillary, I’m afraid has already realized that Dean, through his DFA, has already coronated Obama in 2007, when the plans to move the DNC to Chicago were made. She knows, but she is trying to keep the party’s shit together until she can organize a coalition to take our party back. She won’t say so publicly, but she and Bill are fully aware of the travesty that has been done to our party.

What we have to do… is to find a way to celebrate our diversity and debate our differences without fracturing our communities. — Hillary Clinton

This is the kind of leader we need for our party. One that celebrates diversity and encourages us to use our voices, not one that does everything he can to silence us and disenfranchise us.

And finally:

Censorship reflects society’s [here, Obama's] lack of confidence in itself. It is a hallmark of an authoritarian regime. ~Potter Stewart

Is this where we want to take our party and our country? Sorry, I’m not riding this Kool-aid train….

Caucus Fraud: Caucus Fraud Data, Analysis, Articles, Testimonials & Videos

In two weeks the Democratic Party will formally nominate Barack Obama as its candidate for President of the United States.

It’s the triumph of fraud.

I’ve spent the past two months immersed in data from the 2008 Democratic caucuses. After studying the procedures and results from all fourteen caucus states, interviewing dozens of witnesses, and reviewing hundreds of personal stories, my conclusion is that the Obama campaign willfully and intentionally defrauded the American public by systematically undermining the caucus process.

This site represents the fruits of my research. It’s a work in progress, obviously, and also a central repository for a vast array of data: articles and blog posts from around the web, personal emails to me, interviews with witnesses, affidavits and testimonials, campaign communications, and videos of the caucuses themselves.

I have elected to make this information public. I hope that it sheds light on the caucus process and inspires reform or total elimination of the caucuses. I also hope it gives pause to those Democrats who believe that Barack Obama is the rightful nominee and that Hillary supporters should just “get over it.” I have been a Democrat my entire life, but I will not support the Democratic Party at the cost of democracy.

Lynette Long
August 2008
http://www.lynettelong.com/caucusfraud/

——————–

In addition, I have written a piece about why I and many others feel it is so important that these issues be addressed before we have to live with them in the General Election.

When the Client is in pain, does it matter who is at fault?

http://lnab.newsvine.com/_news/2008/08/15/1752314-when-the-client-is-in-pain-does-it-matter-who-is-at-fault

 

Respectfully

Linda Wade

Progressive Activist