Wednesday, November 12, 2008

Get Your Pitchforks!

If the quintessential Ed Koch thinks that we're 
getting ripped-off, you better believe that we are!

This is bit long, but worth getting a sense of Mayor Koch's outrage.  By the way, get your pitchforks and torches're gonna' need them.

We were had!
By Ed Koch

The I more think about it, the more I believe we were had when the federal government proposed that $700 billion bailout to primarily deal with the liquidity crisis.

At the time, nobody seemed to know what to do. When Secretary of the Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke jointly proposed the bailout in an attempt to avoid a repeat of the Great Depression, nearly everyone threw up their hands and concluded there was no alternative.

At first, some members of Congress — both Republicans and Democrats — balked at the huge bailout package. They said at the very least there should be some minimal safeguards since the legislation was drawn to give the Secretary of the Treasury what appeared to be total power to determine how the bailout would be structured.

These concerns were addressed to some extent in the revised bailout bill which, among other things, staggered the bailout payments and provided for some Congressional lending oversight for half of the $700 billion rescue package. Congress apparently assured that having waited and then passing the legislation on the second time it was presented to the House, it was in fact improved and would prevent our being ripped off by Wall Street for a second time.

We were told over and over by the experts in the news media and government that the real problem was in fact liquidity — banks were just not willing to lend, even to creditworthy applicants. I decided to write a letter to both Treasury Secretary Paulson and Federal Reserve Chairman Bernanke stating my concerns about the use of the federal guarantees and loans.

The letters follow:

October 9, 2008

Henry M. Paulson, Jr.
Ben S. Bernanke


Department of the Treasury
Federal Reserve System

20th & 1500 Pennsylvania Avenue, N.W. Constitution Avenue, N.W.

Washington, D.C. 20220
Washington, D.C. 20551

As you have pointed out, the meltdown occurring in the United States is taking place in large part because of a lack of available liquidity, meaning that lenders — commercial banks in the lead — are not lending to applicants seeking to borrow in order to purchase housing, cars and other big ticket items that the economy relies on to flourish, as well as denying loans to small businesses and local governments seeking to borrow to pay their bills with municipal bond markets largely closed to them.

One of the purposes of the $700 billion recently made available as a result of legislation enacted by the Congress is to give additional liquidity to commercial banking institutions so that they can once again perform their leading raison d'etre — lending money. The major reason for lack of liquidity — availability of loans — is fear, as you have stated, fear that the money will not be repaid either by individuals, governments or institutions, e.g., other banks.

Again, as you have stated, another reason offered by the banks for not lending monies is that much of their assets are now labeled "toxic." It is these assets which, as a result of your efforts, the newly-enacted legislation addresses, freeing the banks of them by having the federal government buy them at a price below their original value, substituting cash to the banks.

If I have accurately stated the facts, why not by order of the United States Treasury and Federal Reserve direct the commercial banks to immediately commence loaning money to "creditworthy" applicants and at a scale comparable to loans individual banks entered into last year? If the banks refuse to abide by such order, they would not be eligible among other punitive measures to sell their "toxic" securities to the Treasury. If the banks require a definition of "creditworthy," your offices will supply it for the various situations that apply.

If the proposal makes sense, it can immediately be implemented and provide the credit needed. If it does not, I would appreciate knowing the reasons why.

All the best. Sincerely, Edward I. Koch

Chairman Bernanke's response dated October 16th is as follows:

Dear Mr. Koch:
I am responding to your letter of October 9, 2008, in which you recommended that the Treasury or bank regulators direct commercial banks to lend to creditworthy borrowers. You further suggested that banks that did not comply with such a directive would be ineligible to participate in the Treasury's Troubled Asset Relief Program (TARP).

We at the Federal Reserve firmly agree that an unfreezing of financial markets and a resumption of lending activity is essential. Credit is the lifeblood of an economy, and continued economic growth will require that substantial credit flows be restarted.

But requiring directly that banks extend specified amounts of credit to creditworthy borrowers would entail many complications. For example, bank regulators would need to create an objective definition for determining which borrowers were creditworthy.

Moreover, because the volume of banks' credit activities can fluctuate over time for a variety of reasons, including those over which they have no control (such as the rate of economic growth in their geographical regions), determining appropriate targets for individual banks' lending activities would be complex and potentially arbitrary. In addition, because of the very large number of banking institutions in the country — more than 8,000 — administering such a program would be extremely resource intensive.

However, we believe that the plans recently announced by the U.S. Treasury, the FDIC, and the Federal Reserve to bolster the capital of banking institutions and to guarantee certain liabilities of banking firms will be effective in strengthening the banking system and in fostering the extension of credit to sound borrowers. The purchases of mortgage-related assets under the Treasury's Troubled Asset Relief Program will also contribute to a recovery of the credit intermediation process by reducing the amount of opaque and difficult-to-value assets from the balance sheets of financial institutions. Moreover, the Federal Reserve continues to provide large amounts of liquidity to the financial system through its standard lending program as well as through a wide range of new liquidity facilities, and these activities should further support credit intermediation.

To be sure, even with these substantial actions by the government, the recovery of our financial markets will take time. Strains on financial markets and institutions are likely to remain considerable and will act as a drag on economic growth for the foreseeable future. However, I believe that the government has now put in place an important array of tools that will enable us to address over time some of the most significant difficulties in our financial system. As a result, with continued focus and effort to resolve these issues, we can look forward to a gradual restoration of lending activities and sustainable economic growth. I hope these comments are helpful. Please let me know if I can be of further assistance.

Chairman Bernanke responded, but Secretary Paulson has not. On November 7, The New York times in its masterful style published an article authored by Steven Erlanger and Katrin Bennhold putting into context the problems we and other countries are facing. The article states, "But there is a fundamental problem that is not easily solved by the usual economic policy tools: how to persuade rattled banks to start lending again — an essential first step to restoring economic health.

It was shocking to learn, "Treasury Secretary Henry M. Paulson, Jr. had to gather the chief executives of the nine biggest American banks and cajole them into accepting about $25 billion each in new capital. But having pleaded with the banks to take the money, and putting no government officials on bank boards, the government had little power to tell them how to spend it. Treasury officials also refused to tell banks to reduce their dividends or to increase their lending by any specific amounts.

I find it incredible that this is happening and no one is calling foul. Where are all the hotshots who supported Paulson in his psyching us all out by conveying that if we did not follow his plan, we would find ourselves in another Great Depression? Why aren't they at the very least denouncing what is now happening? We are keeping alive, in addition to banks, other institutions that have done a terrible job and were greedy. Those companies should be permitted to declare bankruptcy so that someone in the private sector can buy them at a discount, if they are worth purchasing.

Everyone is lining up to get their federal handout. AIG has come back for more and is to receive a total of $150 billion. The three American car companies, General Motors, Chrysler and Ford, have received $25 billion and want another $25 billion of taxpayers' money. Why not let them be bought by others in bankruptcy? There are those who say we are bailing out companies in order to prevent massive layoffs. In my view, those layoffs will come sooner or later anyhow because those companies are run by incompetents and no longer able to compete, while foreign companies like Toyota, manufacturing their cars in the U.S., are selling them and not seeking to be bailed out. They make cars Americans want to buy.

In the meanwhile, the vast majority of Americans have lost upwards of 50 percent of their savings including in the stock market and their 401ks. Particularly heartbreaking are the financial futures of those already in retirement who are dependent on their now lost or greatly reduced savings, as well as the millions more who hoped to retire soon.

Plans should be made to organize to bring to Washington hundreds of thousands if not millions of Americans? We should carry pitchforks to scare the hell out of government, particularly the newly-elected members of Congress as well as all of those reelected recently, for failing us so miserably.


Remember all that stuff about "Change you can believe in"?
Well you can believe it.......

Remember all that stuff I said about all the lobbyists on McCain's campaign staff?  You can believe that we changed that. Now they're on my transition staff.  There's a big difference....words mean something.  Remember I'm a lawyer.....I know exactly what words mean....

Obama team pledges open transition to White House

TRANSITION | Despite anti-lobbyist talk in campaign, they are not out of the loop

November 12, 2008
WASHINGTON -- President-elect Barack Obama's transition co-chairman John Podesta pledged Tuesday "to make this the most open and transparent transition in history." Meanwhile, let's see if the Obama team provides more than the legal minimum when it comes to details on how private money is being raised to help bankroll the transition operation.
"Under President-elect Obama and Vice President-elect Biden, the American people will see a transition of government that is efficient, that is organized, that is bipartisan and more open and transparent than others before," Podesta told reporters at a briefing.

And if by chance you thought that Obama's anti-federal lobbyist drive -- a centerpiece of his campaign -- would mean that federal lobbyists would not work in his transition or White House, then you have not been listening to Obama's carefully worded campaign promises on the subject. Federal lobbyists are welcome -- it would be hard to staff a transition without them, they usually know a lot -- there are just restrictions on what they can work on. Podesta unveiled ethics guidelines covering federal lobbyists who work for the Obama administration. In addition to federal lobbyists not being able to contribute to the transition, they can't lobby while working on the transition. If a person working on the transition has lobbied in the past 12 months, they can't work on the issues they lobbied.

Dodd Watch Day 153: Censorship

Thank God, the Democrats didn't pick Dodd.

I respectfully request that President Bush, during his last
 day on the job, direct the Justice Department to create an 
Independent Special Prosecutor to investigate the failure 
of the financial market, and the role that Congressional and 
Senate members had in it, especially regarding any 
oversight of Fannie and Freddie. Special focus should be 
placed on Barney Frank, Rahm Emmanuel, Chuck Schumer, 
and Senator Chris Dodd. 

If President Bush does not initiate an independent 
investigation now, it will forever be covered up. This is not 
an occasion for bi-partisanship, it is an occasion of citizenship.
Thankfully, there are many people who recognize the importance of establishing the truth in this matter.  Heath is one.
With the effort to get senior Senator Chris Dodd to come clean on his VIP mortgages into its 153rd Day, the story takes an ugly turn by adding some old fashioned political repression to the mix - and the New Haven Independent not only has the expose on the issue - they’ve also got the repressed radio interview.  Former State Senator-turned-radioman Tom Scott interviewed Senator Dodd for his WELI-AM radio show and took the opportunity to take Dodd to task for the continuing mortgage scandal.
Scott, who could never be called a shrinking violet, hammered on Dodd - bringing up everything from the father Dodd’s foibles to the mortgage fraud allegations.  Mr. Dodd resorted to non sequitur commentary and meek complaints about the presumption of guilt before Scott finally relented.  But regular Tom Scott listeners never got to hear the dramatic interview because corporate executives at the station repressed it.  Thankfully, NHI has the audio  at their site.
CTGOP continues to keep our vigil - the Dodd Watch - until Senator Dodd releases the documents associated with his two mortgages from Countrywide Financial, a notorious player in the subprime mortgage mess.  Countrywide got Dodd two jumbo loans for his place in East Haddam and his Washington, D.C. Townhouse under a VIP Program that gave powerful and well-connected clients sweetheart deals on their mortgages.  The Chairman of the Senate Banking Committee would save, by some estimates, $70,000 or more over the life of the loans and had all sorts of fees waived on the front end of the deal.
Dodd admitted over the summer - back when he let it be known that he was being vetted for Obama’s VP pick - that he shared his financial documents with the Obama vetters.  The Justice Department, it was revealed, has been asking questions of the key players in the VIP Program to see if any federal laws were broken.  Senator Dodd needs to come clean - now.

2008 Presidential Election County by County Results

Advice to Republicans.....simply focus on re-taking each blue county.

Click here to see in greater detail....

Canada: A Salute to a Brave and Modest Nation

Yesterday, we celebrated Veteran's Day, and remembered the service and sacrifice of our men and woman who have served so honorably in our military.

A friend sent me the following comments, and I thought that they were worth repeating.  We Americans sometimes feel, and justifiably so, that our sacrifices made on behalf of other nations are not appreciated, or even acknowledged by the rest of the world.  In the same regard, I believe that many times we are blind to the support and sacrifice that Canadians make supporting us.

Jim Lynch

Reprinted here is a remarkable tribute written by Irishman Kevin Myers about Canada's record of quiet valour in wartime. This article appeared in the April 21, 2002 edition of the Sunday Telegraph, one of Britain's largest circulation newspapers and in Canada's National Post on April 26, 2002.

A Salute to a Brave and Modest Nation

LONDON - Until the deaths last week of four Canadian soldiers accidentally killed by a U.S. warplane in Afghanistan, probably almost no one outside their home country had been aware that Canadian troops were deployed in the region. And as always, Canada will now bury its dead, just as the rest of the world as always will forget its sacrifice, just as it always forgets nearly everything Canada ever does.

It seems that Canada's historic mission is to come to the selfless aid both of its friends and of complete strangers, and then, once the crisis is over, to be well and truly ignored. Canada is the perpetual wallflower that stands on the edge of the hall, waiting for someone to come and ask her for a dance. A fire breaks out, she risks life and limb to rescue her fellow dance-goers, and suffers serious injuries. But when the hall is repaired and the dancing resumes, there is Canada, the wallflower still, while those she once helped glamorously cavort across the floor, blithely neglecting her yet again.

That is the price Canada pays for sharing the North American continent with the United States, and for being a selfless friend of Britain in two global conflicts. For much of the 20th century, Canada was torn in two different directions: It seemed to be a part of the old world, yet had an address in the new one, and that divided identity ensured that it never fully got the gratitude it deserved.

Yet its purely voluntary contribution to the cause of freedom in two world wars was perhaps the greatest of any democracy. Almost 10% of Canada's entire population of seven million people served in the armed forces during the First World War, and nearly 60,000 died. The great Allied victories of 1918 were spearheaded by Canadian troops, perhaps the most capable soldiers in the entire British order of battle.

Canada was repaid for its enormous sacrifice by downright neglect, its unique contribution to victory being absorbed into the popular memory as somehow or other the work of the "British." The Second World War provided a re-run. The Canadian navy began the war with a half dozen vessels, and ended up policing nearly half of the Atlantic against U-boat attack.

More than 120 Canadian warships participated in the Normandy landings, during which 15,000 Canadian soldiers went ashore on D-Day alone. Canada finished the war with the third-largest navy and the fourth-largest air force in the world.

The world thanked Canada with the same sublime indifference as it had the previous time. Canadian participation in the war was acknowledged in film only if it was necessary to give an American actor a part in a campaign in which the United States had clearly not participated -- a touching scrupulousness which, of course, Hollywood has since abandoned, as it has any notion of a separate Canadian identity.

So it is a general rule that actors and filmmakers arriving in Hollywood keep their nationality -- unless, that is, they are Canadian. Thus Mary Pickford, Walter Huston, Donald Sutherland, Michael J. Fox, William Shatner, Norman Jewison, David Cronenberg and Dan Aykroyd have in the popular perception become American, and Christopher Plummer, British. It is as if, in the very act of becoming famous, a Canadian ceases to be Canadian, unless she is Margaret Atwood, who is as unshakably Canadian as a moose, or Celine Dion, for whom Canada has proved quite unable to find any takers.

Moreover, Canada is every bit as querulously alert to the achievements of its sons and daughters as the rest of the world is completely unaware of them. The Canadians proudly say of themselves -- and are unheard by anyone else -- that 1% of the world's population has provided 10% of the world's peacekeeping forces. Canadian soldiers in the past half century have been the greatest peacekeepers on Earth -- in 39 missions on UN mandates, and six on non-UN peacekeeping duties, from Vietnam to East Timor, from Sinai to Bosnia.

Yet the only foreign engagement that has entered the popular non-Canadian imagination was the sorry affair in Somalia, in which out-of-control paratroopers murdered two Somali infiltrators. Their regiment was then disbanded in disgrace -- a uniquely Canadian act of self-abasement for which, naturally, the Canadians received no international credit.

So who today in the United States knows about the stoic and selfless friendship its northern neighbour has given it in Afghanistan?

Rather like Cyrano de Bergerac, Canada repeatedly does honourable things for honourable motives, but instead of being thanked for it, it remains something of a figure of fun.

It is the Canadian way, for which Canadians should be proud, yet such honour comes at a high cost.

This week, four more grieving Canadian families knew that cost all too tragically well.
Kevin Myers is an Irish journalist and commentator, who currently writes for the Irish Independent. He is a former contributor to The Irish Times newspaper, where he wrote the An Irishman's Diary column several times weekly. Until 2005, he also wrote for the Sunday Telegraph in the UK.


'Member all that stuff I talked about?  Gettin' rid of the secret wire taps, an, an, bring'n the troops home?

Just had that daily Presidential briefing thing they do, an, an, I will make just a general statement......ain't gonna happen.

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