HOW TO JUDGE: IF ROBERT REICH LIKES IT, IT HAS TO BE BAD

Professor Robert Reich is one of the most useful barometers in America today. As a dedicated leftist and consummate statist, if he is in favor of something it is wise, in almost every instance, to kill what it is he thinks is a good idea.

His advocacy in the article that follows is a perfect example.

Since Reich supports the concept of government health care, there is no way it will work. Academics like the good professor are wonderful discussing theory but useless when it comes to the real world outcomes of Utopian ideology.

Just to begin with, Reich fails to acknowledge that virtually every poll and survey done on the subject of government health care finds between 70%-80% of respondents DO NOT want to give up their current health care coverage. A small detail to a statist like Reich.

He repeatedly mentions the importance of providing the current system with incentives to be more competitive and postulates that government provided coverage will create that incentive. Only an academic or an undereducated five year old would make such a claim.

The fact is, free market competition is what incentivizes companies to improve their product and reduce their price. Forced government coverage that dictates what will be paid to whom for what is not competition. It is statist tyranny. It is a free market killer. It will not enhance competition, it will eliminate it. It is why monopolies are against the law. Only those who have never been in the competitive arena could fail to grasp that obvious reality.

Reich is wholly disingenuous when he denies that government health care is not a Trojan Horse. It is precisely that because it will choke off competition by dictating the who, what, where, when and how of medical care for millions of Americans. In the process, the other options will be isolated and eventually strangled by the dictates of government.

Why? Because the government option cannot succeed in the long run if consumers have the chance to choose alternatives. Look at single payer care in Canada. It is illegal there to pay for health care outside of the government system. That is why so many Canadians come here to get treatment.

Another misleading claim by Reich is that the government plan will not be subsidized by the government. Who the heck does he think will be subsidizing it? He likes to claim the government will give the money to people in need but they will still be able to choose. Choose from what? Regular health insurance that they cannot possibly afford or the government option which is the only one they can afford. That is NOT a choice and Reich knows it.

Mr. Reich encourages Obama to "come out swinging" for the government option. Easy for him to say since he is not a politician and not in elective office. Obama cannot do that. Why?

Because the public is not buying the fairy tales put out by Reich and his Utopian statist ilk.


Why We Need a Public Health-Care Plan
Without the government as competition, the private sector has little incentive to improve.
By ROBERT B. REICH

Why has health-care reform stalled in Congress? Democrats, after all, control both Houses, and President Obama, whose popularity remains high, has made universal health care his No. 1 priority. What's more, an overwhelming majority of the public wants it. In the most recent Wall Street Journal/NBC News poll, 76% of respondents said it was important that Americans have a choice between a public and private health-insurance plan. In last week's New York Times/CBSNews poll, 85% said they wanted major health-care reforms.
So why the stall? Mainly because Congress can't decide how to pay for it. The hardest blow came last week when the Congressional Budget Office (CBO) estimated that the trial-balloon bill emerging from the Senate Health Committee would cost a whopping $1 trillion over 10 years and would cover only a fraction of Americans currently without health care. According to the CBO, another tentative bill, this one coming out of the Senate Finance Committee, would cost even more -- $1.6 trillion.
That spells political trouble. Republicans who never batted an eye over George W. Bush's wild spending habits have become born-again fiscal hawks. Blue Dog Democrats are nervous about mounting deficits. Even the president admits that the flow of red ink in future budgets keeps him up at night.
No one wants to raise taxes or even be accused of thinking about the subject. But honest politicians have to admit that universal health care will require additional revenues. The likeliest sources are limits on certain tax deductions and a cap on tax-free employer-provided health care. Would the public go along? The most intriguing finding in last week's New York Times/CBS poll was that most respondents said they would be willing to pay higher taxes to ensure everyone had health insurance.
But before we even get to this point, it's important to recognize that those terrifying CBO cost projections significantly overstate the costs. They did not include potential cost savings from the lynchpin of health-care cost containment: a so-called public option that would give people who don't get health care from their employer the choice of a public insurance plan. Why? For the simple reason that the Senate committees hadn't yet agreed on a public option. Yet without a public option, the other parties that comprise America's non-system of health care -- private insurers, doctors, hospitals, drug companies, and medical suppliers -- have little or no incentive to supply high-quality care at a lower cost than they do now.
Which is precisely why the public option has become such a lightening rod. The American Medical Association is dead-set against it, Big Pharma rejects it out of hand, and the biggest insurance companies won't consider it. No other issue in the current health-care debate is as fiercely opposed by the medical establishment and their lobbies now swarming over Capitol Hill. Of course, they don't want it. A public option would squeeze their profits and force them to undertake major reforms. That's the whole point.
Critics say the public option is really a Trojan horse for a government takeover of all of health insurance. But nothing could be further from the truth. It's an option. No one has to choose it. Individuals and families will merely be invited to compare costs and outcomes. Presumably they will choose the public plan only if it offers them and their families the best deal -- more and better health care for less.
Private insurers say a public option would have an unfair advantage in achieving this goal. Being the one public plan, it will have large economies of scale that will enable it to negotiate more favorable terms with pharmaceutical companies and other providers. But why, exactly, is this unfair? Isn't the whole point of cost containment to provide the public with health care on more favorable terms? If the public plan negotiates better terms -- thereby demonstrating that drug companies and other providers can meet them -- private plans could seek similar deals.
But, say the critics, the public plan starts off with an unfair advantage because it's likely to have lower administrative costs. That may be true -- Medicare's administrative costs per enrollee are a small fraction of typical private insurance costs -- but here again, why exactly is this unfair? Isn't one of the goals of health-care cost containment to lower administrative costs? If the public option pushes private plans to trim their bureaucracies and become more efficient, that's fine.
Critics complain that a public plan has an inherent advantage over private plans because the public won't have to show profits. But plenty of private plans are already not-for-profit. And if nonprofit plans can offer high-quality health care more cheaply than for-profit plans, why should for-profit plans be coddled? The public plan would merely force profit-making private plans to take whatever steps were necessary to become more competitive. Once again, that's a plus.
Critics charge that the public plan will be subsidized by the government. Here they have their facts wrong. Under every plan that's being discussed on Capitol Hill, subsidies go to individuals and families who need them in order to afford health care, not to a public plan. Individuals and families use the subsidies to shop for the best care they can find. They're free to choose the public plan, but that's only one option. They could take their subsidy and buy a private plan just as easily. Legislation should also make crystal clear that the public plan, for its part, may not dip into general revenues to cover its costs. It must pay for itself. And any government entity that oversees the health-insurance pool or acts as referee in setting ground rules for all plans must not favor the public plan.
Finally, critics say that because of its breadth and national reach, the public plan will be able to collect and analyze patient information on a large scale to discover the best ways to improve care. The public plan might even allow clinicians who form accountable-care organizations to keep a portion of the savings they generate. Those opposed to a public option ask how private plans can ever compete with all this. The answer is they can and should. It's the only way we have a prayer of taming health-care costs. But here's some good news for the private plans. The information gleaned by the public plan about best practices will be made available to the private plans as they try to achieve the same or better outputs.
As a practical matter, the choice people make between private plans and a public one is likely to function as a check on both. Such competition will encourage private plans to do better -- offering more value at less cost. At the same time, it will encourage the public plan to be as flexible as possible. In this way, private and public plans will offer one another benchmarks of what's possible and desirable.
Mr. Obama says he wants a public plan. But the strength of the opposition to it, along with his own commitment to making the emerging bill "bipartisan," is leading toward some oddball compromises. One would substitute nonprofit health insurance cooperatives for a public plan. But such cooperatives would lack the scale and authority to negotiate lower rates with drug companies and other providers, collect wide data on outcomes, or effect major change in the system.
Another emerging compromise is to hold off on a public option altogether unless or until private insurers fail to meet some targets for expanding coverage and lowering health-care costs years from now. But without a public option from the start, private insurers won't have the incentives or system-wide model they need to reach these targets. And in politics, years from now usually means never.
To get health care moving again in Congress, the president will have to be clear about how to deal with its costs and whether and how a public plan is to be included as an option. The two are intimately related. Enough talk. He should come out swinging for the public option.

Mr. Reich, professor of public policy at the University of California at Berkeley and former Secretary of Labor under President Clinton, is the author of "Supercapitalism: The Transformation of Business, Democracy, and Everyday Life" (Alfred A. Knopf, 2007).

Copyright 2009 Dow Jones & Company, Inc

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IRAQIS & OBAMA WANT IT BOTH WAYS

Iraqis want American troops out of their country. Obama wants American troops out of Iraq. Both are getting their wish.

But as our military withdraws, hard reality sets in on the people of Iraq and on the Obama administration. Now that Americans are not longer securing the streets and markets of Baghdad and other cities, Al Qaeda is re-entering neighborhoods to rain terror down upon innocent Iraqis, as the following article attests.

Apparently neither Obama or the Iraqis themselves fully understand the inner workings of terrorism and jihadists. The people of Iraq are getting their country back, just as they insisted. What they cannot seem to grasp is that they do not have the discipline or will to secure their own future. What they will learn very shortly is that Al Qaeda does.

The folly of the Obama path is that by gaining his long held wish to get us out of Iraq, he will end up with a much larger crisis on his hands than if we had stayed until the job was fully completed. Now, not only is the Afghanistan mess completely his to resolve but he is in the process of re-adding Iraq to his crowded foreign affairs menu. Because he is so naive and arrogant, he will have to learn the lessons of Al Qaeda the hard way instead of learning from the Bush experience.

Maybe the Iraqis will find the resolve to stand up on their own in order to protect their well being. But don't bet the farm on that happening. They failed to stand up to Saddam and they only stood up against Al Qaeda because of the presence and support of the American military. Middle Easterners have a culture that tends to side with strength, regardless of where it comes from or what consequences they must endure. In the realm of Al Qaeda, that price will be very high.

It is up to Obama to pick up the ball and run with it relative to the degraded security situation in Iraq. He won't. He lacks the leadership genes in the first place, and his naivete will otherwise prevent him from preempting what just might devolve into a disaster.

What we are witnessing before us is a daily demonstration that Barack Obama is not ready for prime time nor is he capable of leading this great nation.


Angry Iraqis demand protection from bombings
By Muhanad Mohammed

BAGHDAD (Reuters) – Hundreds of angry Iraqis gathered on Thursday around the wreckage of a market bombing in Baghdad where 78 people were killed, demanding better protection from the government when U.S. troops pull back to rural bases.
A string of blasts has cast doubt on Iraqi forces' ability to keep the lid on a stubborn insurgency as U.S. combat troops withdraw from towns and cities by June 30. More explosions on Thursday killed five policemen and at least two civilians.
Violence has dropped sharply across Iraq in the past year, but militants including Sunni Islamist al Qaeda continue to launch car and suicide bombings aimed at undermining the Shi'ite Muslim-led government and reigniting sectarian conflict.
Residents at the site of Wednesday's blast in Baghdad's Sadr City slum sobbed and hugged each other, and many furiously cursed the authorities. The blast came four days after U.S. soldiers handed control of the Shi'ite area to Iraqi forces.
"I expect more explosions," Mustafa Hussain, a 33-year-old grocer, told Reuters at the scene, where pieces of flesh, shreds of bloodied clothing and shoes still littered the area.
"Iraqi forces don't have enough experience and they don't check vehicles well at their checkpoints ... they must prove their abilities to the people."
Jawad Kadhim, a 40-year-old Sadr City taxi driver, said the attack was aimed at stoking sectarian hatred.
"The terrorist groups want to send a message that when the U.S. troops leave the cities there will be a security vacuum," he said. "Relaxed security and corruption at checkpoints is the main reason we fear what may come next."
In a statement, the United Nations envoy to Iraq called on Iraqis to avoid a return to the sectarian violence that nearly tipped Iraq into all out civil war in 2006 and 2007.
"We have long been aware that certain groups ... (are) hoping for a return to the dark days," Staffan de Mistura said.
"Our appeal to everyone ... is not to fall into the killers' trap and to avoid responding to this provocation in the way that they desperately want -- with sectarian hatred and violence."
A massive truck bomb killed 73 people near the northern city of Kirkuk on Saturday. That and the Sadr City market bombing were the bloodiest attacks in the country for more than a year.
Members of parliament delayed a grilling of the oil minister to denounce both bombings, and agreed to give the families of the Kirkuk blast victims one million dinars ($856.5) each.
"HATEFUL CRIMES"
The International Committee of the Red Cross said it delivered water and a ton of medical supplies to the hospital where most of the wounded from Sadr City were being treated.
"The political nature of these attacks is becoming clear. They are an attempt to delay or suspend the withdrawal of U.S. forces from Iraqi urban centers according to the timetable," Vice President Tareq al-Hashemi said in a statement.
Elsewhere on Thursday, police in the once turbulent but recently secure western city of Falluja said a roadside bomb destroyed a police vehicle and killed all five policemen inside.
Falluja in Anbar province was once the heartland of the rebellion against the U.S. military and Iraqi government forces.
Hours later, at least two people died and 30 others were wounded when another bomb struck a crowded bus terminal in the south of the capital, a hospital source said.
In eastern Baghdad, the U.S. military said nine U.S. soldiers were wounded when two roadside bombs hit their patrol.
Prime Minister Nuri al-Maliki, a member of Iraq's Shi'ite majority, urged the world to denounce the bloodshed.
"We call on the international community, especially Arabic and Islamic states, to take a clear and decisive stance against these hateful crimes," he said in a statement.
Analysts say attacks are also likely to intensify ahead of a parliamentary election in January that will be a test of whether the country's feuding factions can live together after years of sectarian slaughter unleashed by the 2003 U.S. invasion.

Copyright © 2009 Yahoo! Inc

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CHICAGO: EVIDENCE OF THE LEFTIST GOVERNING RECORD

The track record of the left in American politics is as clear as it can be. Virtually wherever they have been in control of government for any significant length of time, failure is everywhere in evidence. As the article below illustrates, Chicago is a major poster child for this nationwide reality.

The Daley Democrat party machine has controlled the windy city for decades. In this example, crime runs so rampant there that the medical blood supply is in peril of running out. There is so much crime and so many bleeding victims that hospitals are desperate to resupply their blood reserves.

Will voters in Chi-town ever figure out the obvious? Democrat party machine governance has and is ruining their city. We can only hope that a tipping point will be reached sooner rather than later so that a meaningful change of direction can take place. Like so many American metropolitan areas, Chicago is seriously degraded by corruption and management so poor as to continue to devolve into a cesspool of failure. And virtually all of those cities have long been governed by the Democrat left. Anyone seeing the pattern?

Everyone can recall the rotten condition of the Big Apple when Rudy Giuliani became the mayor. Democrat rule had driven New York City to the edge of the abyss and most of the world did not believe that it could recover. At that very late date, voters woke up and took a desperate non-leftist flyer. And as they say, the rest is history. New York underwent a miraculous turn around and once again became a world class city.

All because the left was removed from positions of control and power and reasonable people with the greater good in mind took over and led the parade back to sanity, safety, fiscal normality, cleanliness and far more honest governance.

What is most disturbing about this news is that the most doctrinaire Chicago leftists packed up and went to Washington DC earlier this year to take control of the federal government. Thinking about that can keep you up at night.

What can we expect from that unfortunate turn of events? Look to the city of big shoulders for the answers.

By the way, if you happen to life near Chicago, volunteer to give blood.


Chicago Violence Endangers Vital Blood Supply
ReportingPamela Jones
O-Negative blood is in short supply at hospital emergency rooms.

There is a real emergency for a county hospital emergency room. The uptick in violence is literally draining the blood supply. And as CBS 2's Pamela Jones reports one specific blood type is running dangerously short. "I lost a lot of blood, so they had to give me a lot of blood for me to get back on my toes," said De'London Smith. De'London Smith was stabbed through the heart on Friday. He's still recovering at Stroger Hospital where he says blood transfusions saved him. "It gave me life again. Because from what I heard, I was dead," Smith said. But now it's the trauma unit that needs saving. Doctors say the facility's supply of O-negative blood is dwindling. "So that's the lifesaving blood, and that's what we have virtually nothing left in the hospital," said trauma surgeon Dr. Andrew Dennis. The blood bank showed us the eight units of O-negative blood that are left. Only three of the units are designated for trauma patients, though. Any more outbreaks of violence on the streets pose a threat here. "Tonight we may be in a very tough situation," Dr. Dennis said. "Because we're that short on O-negative blood." O-negative is the universal donor type and anyone can accept it when seconds count. "Anyone that is bleeding, that needs blood emergently, that is their first line of defense," Dr. Dennis said. Dr. Dennis says the reason for the shortage is the high numbers of victims of shootings and other violent crimes who come to Stroger Hospital for life-saving treatment. "We see probably an average of between 10 and 15 people who get shot or stabbed every night," Dr. Dennis said. Addie Lewis has seen the benefits of blood donation firsthand. She stands in her 18-year-old grandson's hospital room; he was shot in the neck."Everybody has been so good, he's had about eight or 10 blood transfusions," Lewis said. Her family and others urge the public to give blood and help save more lives. "Donate blood to the county because it's my day today and it's someone else's day tomorrow," Lewis said. CBS 2 talked to Lifesource, which supplies Stroger Hospital and others in Chicagoland. They say the O-negative blood shortage is not unique to Stroger and that they're seeing a shortage across the area. If you donate just once, the blood you give could save three lives. If you'd like to donate blood, Stroger Hospital is hosting a blood drive Wednesday, June 24th from 9 a.m. to 4 p.m. To schedule your appointment, call Lifesource at (847) 803-7943 or register online by clicking here.

(© MMIX, CBS Broadcasting Inc.

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OBAMA'S PLAN STANDS IN THE WAY OF RECOVERY

There is definitely some slippage in the house of Obama. When that leftist propaganda organ, the New York Slimes, opens it's pages to criticism of the team Obama economic recovery program, there has to be a little less joy in Mudville.

President Obama regularly takes his eye off the ball relative to the economic mess we find all around us. He travels the world apologizing for American history. He makes a point of going to Cairo to reach out to the "Muslim world", whatever that turns out to be. He does fund raisers in Hollywood and townhalls in St. Louis. He spends a quarter million tax dollars to fly to Chicago so that he can deliver a speech, and be booed by the crowd, in Chicago. He takes his wife out on a date night in New York rather than Washington. And so on.

All the while, our economy continues to sputter, stutter, stagger and sag.

During his time in office almost one and three quarters of a million people have lost their jobs. Two major automakers have gone into bankruptcy. Foreclosures continue to be on the rise. The value of the dollar has plummeted. The price of gas is back on the rise. Many state governments are in fiscal collapse. Cities and counties across the nation have cut their budgets to the bone or even deeper. Banks continue to so restrict lending to businesses that even more layoffs occur and capital for inventory or growth has gone missing. Everywhere one goes, businesses are closing, shopping centers are near empty and restaurants are dying for lack of customers.

Most Americans are hording what little discretionary spending money they have available. People are just trying to hang on so that they can come out of the other end of this downturn still in one piece.

But Obama spreads his focus far and wide, in some instances attending to matters of no consequence to our recovery and in other instances setting exactly the wrong example of how to go about life in the midst of economic turmoil.

He clearly is not focused like the proverbial laser beam on the economy. Worse yet, much of what he and his party are doing with "stimulus" pork and political payoff spending and auto union bailouts is fully counterproductive to the welfare of the country. Not to mention ongoing attempts to nationalize entire industries.

They continue to pursue a special interest driven agenda that actually undercuts recovery and both delays and denies our economic well being. Why? For what they perceive to be political gain and constituent payback.

As the article below attests, even the Obama newspaper of record is beginning to have second thoughts as they plunge headlong towards bankruptcy along with any number of similarly biased publications. After all, even a stopped clock is right twice a day.

Barack Obama assembled an economic team primarily comprised of academics. That is, people who live in a world of theory and have not a wit of real life free market capitalism experience.

As a result, our economy remains gravely injured and is still on life support. Heaven help the United States of America since team Obama has not a clue as to how to do so.


The Economy Is Still at the Brink
By SANDY B. LEWIS and WILLIAM D. COHAN

WHETHER at a fund-raising dinner for wealthy supporters in Beverly Hills, or at an Air Force base in Nevada, or at Charlie Rose’s table in New York City, President Obama is conducting an all-out campaign to try to make us feel a whole lot better about the economy as quickly as possible. “It’s safe to say we have stepped back from the brink, that there is some calm that didn’t exist before,” he told donors at the Beverly Hilton Hotel late last month.
Mr. Obama thinks that the way to revive the economy is to restore confidence in it. If the mood is right, the capital will flow. But this belief is dangerously misguided. We are sympathetic to the extraordinary challenge the president faces, but if we’ve learned anything at all two years into the worst financial crisis of our lifetimes, it is that a capital-markets system this dependent on public confidence is a shockingly inadequate foundation upon which to rest our economy.
We have both spent large chunks of our lives working on Wall Street, absorbing its ethic and mores. We’re concerned that nothing has really been fixed. We’re doubly concerned that people appear to feel the worst of the storm is over — and in this, they are aided and abetted by a hugely popular and charismatic president and by the fact that the Dow has increased by 35 percent or so since Mr. Obama started to lay out his economic plans in March. But wishing for improvement and managing by the Dow’s swings are a fool’s game. (Disclosure: One of us, Mr. Lewis, was convicted on federal charges of stock manipulation in 1989, pardoned by President Bill Clinton in 2001 and had his lifetime trading ban overturned by the Securities and Exchange Commission in 2006; documents relating to the case can be found at sblewis.net.)
The storm is not over, not by a long shot. Huge structural flaws remain in the architecture of our financial system, and many of the fixes that the Obama administration has proposed will do little to address them and may make them worse. At another fund-raising event, for Senator Harry Reid, President Obama said: “We didn’t ask for the challenges that we face. But we are determined to answer the call to meet those challenges, to cast aside the old arguments and overcome the stubborn divisions and move forward as one people and one nation .... It will take time but I promise you, I promise you, I’ll always tell you the truth about the challenges we face.”
Keeping that statement in mind — as well as an abiding faith in the importance of properly functioning capital markets — we have come up with a set of questions meant to challenge a popular president, with vast majorities in Congress, to find the flaws in the system, to figure out what’s being done to fix them and to get to the truth about the difficulties we face as we set out to restore the proper functioning of our markets and our standing in the world.
•
Six months ago, nobody believed that our banking system was well designed, functioning smoothly or properly regulated — so why then are we so desperately anxious to restore that model as the status quo? Nearly every new program emanating these days from the Treasury Department — the Term Asset-Backed Securities Loan Facility, the Public Private Investment Program, the “stress tests” of major banks — appears to have been designed to either paper over or to prop up a system that has clearly failed.
Instead of hauling out the new drywall to cover up the existing studs, let’s seriously consider ripping down the entire structure, dynamiting the foundation and building a new system that rewards taking prudent risks, allocates capital where it is needed, allows all investors to get accurate and timely financial information and increases value to shareholders and creditors.
As a start, the best-compensated executives at the top of these big banks, hedge funds and private-equity firms should be treated like general partners of yore. If a firm takes prudent risks that pay off, this top layer of management should be well compensated. But if the risks these people take are imprudent and the losses grave, they should expect to lose their jobs. Instead of getting guaranteed salaries or huge bonuses, they should have the bulk of their net worth completely at risk for a long stretch of time — 10 years come to mind — for the decisions they make while in charge. This would go a long way toward re-aligning the interests of these firms with those of their shareholders and clients and the American people, who have been saddled with their risks and mistakes.
•
Why is so much effort being put into propping up those at the top of the economic pyramid — the money-center banks, the insurance companies, the hedge funds and so forth — when during a period of deflation like the one we are in, any recovery will come only by restoring the confidence of the people down at the bottom of the pyramid?
Confidence will return only when jobs can be found and mortgage payments are made. Even if Mr. Obama’s claim is true that his $780 billion stimulus package “saved or created” some 150,000 jobs, we seem a long way away from the point where those struggling to get by will feel like spending again. What happens when people buy a car once every 10 years instead of once every two or three, especially now that we taxpayers own such a big percentage of the American auto industry?
•
Instead of promising the imminent return of good times, why isn’t Mr. Obama talking more about the importance of living within our means and not spending money we don’t have on things we don’t need? We used to be a frugal nation. The president should be talking about kicking our addictions to easy credit, to quick fixes and to a culture of more is better (and Congress’s new credit-card legislation, while perhaps eliminating some of the worst aspects of that industry, certainly didn’t send the right message about personal finance).
Gas-guzzling S.U.V.’s, cigarette boats, no-income mortgages and private jets should be relegated to the junk heaps of history, or better yet, put in a museum dedicated to never forgetting the greed and avarice that led us so far astray.
•
Why is the morphine drip still in the veins of the financial system? These trillions in profligate federal spending are intended to make us feel better again even though feeling pain, and dealing with it responsibly, would be healthier in the long run. It is time to stop rescuing the banks that got us into this mess. If that means more bank failures on a grander scale or the dismemberment of Citigroup, so be it. Depositors will be protected — up to $250,000 per account — but shareholders, creditors and, sadly, many employees will, for the long-term health of the system, need to feel the market’s wrath.
•
Is there to be any limit on bailouts? We have now thrown money at the big banks, any number of regional ones, insurance companies, General Motors, Chrysler and state and local governments. Will we soon be bailing out Dartmouth, which just lost its AAA bond rating? Is there no room left for what the Austrian economist Joseph Schumpeter termed “creative destruction”? And what is the plan to get the American people out of all these equity stakes we now own and don’t want?
Furthermore, for government leaders to decide who shall live and who shall die in an economic sense opens them up to legitimate charges of crony capitalism and favoritism. We will benefit in the long run from a return to market discipline.
•
Why has Mr. Obama surrounded himself largely with economic advisers who are theoreticians and academics — distinguished though they may be — but not those who have sat on a trading desk, made a market, managed a portfolio or set a spread?
In our view, one of the ways out of this economic conundrum is to have experienced traders — not hothouse flowers — design incentives that will encourage the market to have buyers and sellers meet anew around the proper valuations of assets, not some artificial construct of a market propped up by a pliant Financial Accounting Standards Board or government-sponsored programs that appear to be virtually giving money away to hedge funds and private-equity firms so that they will buy assets they would not ordinarily buy. We’re not talking about putting the fox in charge of the henhouse, just putting people who know how markets function in the real world into the important seats in Washington.
•
Why isn’t the Obama administration working night and day to give the public a vastly increased amount of detailed information about what happens in financial markets? Ever since traders started disappearing from the floor of the New York Stock Exchange in the last decade of the 20th century, there has been less and less transparency about the price and volume of trades. The New York Stock Exchange really exists in name only, as computers execute a very large percentage of all trades, far away from any exchange.
As a result, there is little flow of information, and small investors are paying the price. The beneficiaries, no surprise, are the remains of the old Wall Street broker-dealers — now bank-holding companies like Goldman Sachs and Morgan Stanley — that can see in advance what their clients are interested in buying, and might trade the same stocks for their own accounts. Incredibly, despite the events of last fall, nearly every one of Wall Street’s proprietary trading desks can still take huge risks and then, if they get into trouble, head to the Federal Reserve for short-term rescue financing.
Here’s something that should change in terms of transparency. The most recent price that any stock traded for should be published online in real time for all to see. And the public should have access to a new type of electronic ticker that provides market information in language that all can understand, not just the insiders.
As for those impossibly complex securities that caused so much of the trouble — among them derivatives, credit-default swaps and asset-backed securities — the S.E.C. should have the power to make public all the documentation surrounding these weapons of mass financial destruction, including all data about the current costs of buying and selling them and the cash flow underlying them. We also need widely accessible, real-time reporting of all trades in the bond market. We bet Mike Bloomberg’s company could help design such a system for our benefit.
•
Why is the government still complicit in making the system ever less transparent, even when it comes to what should clearly be considered public information? For instance, it took more than a year for the Federal Reserve to disclose that it had agreed to pay BlackRock — the huge money manager that is 45 percent owned by Bank of America — and others $71 million in a no-bid contract to manage the $30 billion of toxic assets that JPMorgan did not want when it bought Bear Stearns in March 2008. And that is only one of the five contracts BlackRock has with the government as a result of this crisis — the nature of the other contracts remains secret.
Treasury Secretary Timothy Geithner has made much of financialstability.gov, the Treasury’s new Web site dedicated to “transparency, oversight and accountability.” But look it over and try to find, for example, just one record of a bona fide credit-default swap, or the names of the hedge-fund and private-equity investors who have participated in the Term Asset-Backed Securities Loan Facility bonanza. It was only a lawsuit filed by a watchdog group that convinced the Treasury to divulge details of former Secretary Henry Paulson’s October meeting with the chief executives of the 10 largest Wall Street firms to force them to take money from the Troubled Asset Relief Program. A lawsuit filed last November by Bloomberg News to force the Federal Reserve to reveal the details on more than $2 trillion in loans that went to banks including Citigroup and Goldman Sachs is still pending in federal court.
And what has become of the S.E.C.’s year-old investigation into who made short-dated, out-of-the-money bets in March 2008 hoping Bear Stearns would fail — bets that were suddenly worth millions of dollars when the company did collapse later that month?
Why do we still not know why Mr. Paulson, Mr. Geithner and the Federal Reserve chairman, Ben Bernanke, allowed Lehman Brothers to file bankruptcy last Sept. 15 but then, a day later, saved A.I.G.? Or why last November this trio decided to absorb potential losses on $301 billion of Citigroup’s shaky assets, when conventional wisdom among insiders held that they were worth only $150 billion at best?
Also, before Dick Fuld, Lehman Brothers’ chief executive, appeared before the House Committee on Oversight and Government Reform last October, it demanded from company executives boxes of documents about what happened at Lehman and why. Where are those documents?
•
Why hasn’t President Obama insisted on public hearings over what happened during this financial crisis?
Not a single top executive of a Wall Street securities firm responsible for causing the financial crisis has had the courage or the decency to step forward in front of the cameras and explain to the American people in his own words exactly how and why he allowed his firm to cause the crisis. Both Mr. Fuld and Alan Schwartz, the chief executive of Bear Stearns at the end, in their Congressional testimony blamed the proverbial once-in-a-century financial tsunami. Do they or any of their peers really think this is true?
There may be a way to find out. There is much talk nowadays coming from top bankers — Lloyd Blankfein of Goldman Sachs, Jamie Dimon of JPMorganChase, John Mack of Morgan Stanley and even Ken Lewis of Bank of America — about seeing how quickly they can repay to the Treasury the TARP money Mr. Paulson forced on them. One precondition of their being allowed to repay the funds should be a requirement that each gives a public deposition and explains, under oath, what truly happened and why.
Such a public hearing would be meant only to offer a truthful assessment of the errors in judgment made at each firm and to promote understanding, so that we — somehow — can avoid repeating the same mistakes again. It would not be about indictments. These men should be offered use immunity from prosecution for their honest testimony, but only with a clear understanding that the failure to tell the truth at any point would result in serious legal consequences. The hearing could be complemented by a truth-seeking commission established to hear the accounts of several people who have departed the scene, including, among others, Mr. Paulson, former Treasury Secretary Robert Rubin and former Wall Street chiefs like Mr. Fuld, Hank Greenberg of A.I.G., Sanford Weill of Citigroup, Jimmy Cayne of Bear Stearns and Stan O’Neal of Merrill Lynch. While far removed from their positions of authority, these men have tales to tell about how this crisis got started and why. •
Why are we not looking to change our current civil and criminal racketeering statutes, which are playing a perverse role in investigations of the crisis? Statutes meant to give prosecutors extraordinary powers of seizure before an indictment is handed up, or to impose treble damages, are appropriately used to break up rings of criminal behavior like the Mafia or drug cartels.
But a few clever prosecutors could use such laws to bring charges against people or firms in the financial services industry whose pattern of bad behavior played important roles in the collapse. Such outright seizure of capital or assets through use of the racketeering statutes can do much harm by giving prosecutors an unnecessarily powerful role in our capital markets. There must be a way to keep what is good about the statutes and to make sure they are not used for ill in trying to get to the bottom of the financial meltdown.
We are in one of those “generational revolutions” that Jefferson said were as important as anything else to the proper functioning of our democracy. We can no longer pretend that our collective behavior as a nation for the past 25 years has been worthy of us as a people. Many of us hoped that Barack Obama’s election would redress the dire decline in our collective ethic. We are 139 days into his presidency, and while there is still plenty of hope that Mr. Obama will fulfill his mandate, his record on searching out the causes of the financial crisis has not been reassuring. He must do what is necessary to restore the American people’s — and the world’s — faith in American capitalism and in our nation. Answering our questions may help us get back on track. But time is wasting.

Sandy B. Lewis, an organic farmer, founded SB Lewis & Co., a brokerage house. William D. Cohan, a contributing editor at Fortune and former Wall Street banker, is the author of “House of Cards: A Tale of Hubris and Wretched Excess on Wall Street.”

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TEXAS: GETS IT RIGHT WITHOUT THE LEFT

As the accompanying article clearly illustrates, in Texas life is good in large part due to the fact that the far left is not in charge.

Texas is the model for the way government should operate. Most significantly, they have a part time rather than a full time legislature. It ought to be that way everywhere. In places like California where the legislature is a full time operation, the state is so upside down that literally nothing works properly.

There is no need for full time legislatures and there is especially no need on any level of government for professional career politicians. They are in fact the root cause of most of the mess that the majority of states and the nation finds all around them.

But the best aspect of this article by far is the news that the trial lawyers, one of the richest and most contributive leftist constituencies in America, blew $9M out the door trying to influence the Texas legislature to favor their cause and got absolutely nowhere for their money. Would it were that way everywhere in the country.

One of the root causes of much of what is wrong about our nation can be traced directly to the reality of far too much needless litigation anywhere you look. For instance, it plays a big role in the run away costs associated with health care. It robs our government schools of hundreds of millions of dollars every year. It drives up wholly unnecessary costs in the business world, all of which gets passed on to us consumers. Frivolous torts cost the American economy billions of dollars annually, most of which is a useless and unnecessary payday for greedy lawyers and their equally greedy clients.

And who smooths they way for all of that waste? Liberal Democrat politicians who, for all intents and purposes, exist and thrive in the pockets of the trial lawyers. In fact most of them, including Barack Obama, are lawyers themselves. Only Lincoln, among Presidents rated great, was a lawyer, but he was self-educated and anything but a man of the left. In fact, he was an honorable and honest lawyer which in his time was more the norm but which, in today's world, is an endangered species.

After all, in most states it is much easier to get rich quick via the frivolous tort litigation route than it is to actually earn wealth or hit the lottery. And America has far, far too many attorneys all of whom are looking to make a fast buck and live La Dolce Vita by taking virtually anything to court. Or by running for office as a career politician.

You see, Texas is not left, at least not anymore. In the Lone Star State, people understand how the world works. They can see straight and they have common sense, by and large.

Thus their tax rates are low, their economy so much better than virtually all of the rest of the nation. As noted below, Texas created more jobs last year than all of the rest of the states COMBINED! Certainly the state is not without it's problems, but they are insignificant compared to say the late great State of California. Of course, in Texas the state legislature has not been dominated by the left for decades as has that of California.

Want to see what the future of this nation holds with the federal government in the hands of the left? Look at California, the canary in the coal mine.

Need a role model what America can be again? Look no further than Texas.


Texas Tort Victories
The plaintiffs-lawyer lobby blows $9 million and gets nowhere.

Texas recently finished its legislative session, and the best news is what didn't pass. Namely, some 900 bills put forward by the tort bar.
The plaintiffs-lawyer lobby spent $9 million in last year's state legislative elections to help smooth the way for these bills, which were designed to roll back tort reforms passed in recent years, or to create new ways to sue. Yet that money wasn't enough to convince most Texas legislators to give up two-decades of hard-won legal progress, which ranges from class-action clean-up to medical liability reform.
Among the more notable failed proposals were a bill that would have shifted the burden of medical proof away from plaintiffs and on to defendants in asbestos and mesothelioma cases; an attempt to rip up Texas's successful system of trying multidistrict litigation in a single court; and legislation to allow plaintiffs to sue for "phantom" medical expenses.
Part of this success was due to the legislature's gridlock over a controversial voter ID bill. Yet Republicans who run the Senate and House also did yeoman's work to keep many bills from ever reaching the floor. Republicans also got a helping hand from a number of brave, antilawsuit Democrats, many of them from South Texas, where litigation has exacted more of an economic toll.
Speaking of the economy, it's notable that Texas created more new jobs last year than the other 49 states combined. Texas's low tax burden is one reason. But also important is a fairer legal environment in which companies are less likely than they were a generation ago to face jackpot justice.

Copyright 2009 Dow Jones & Company, Inc

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SENATE SLAVERY APOLOGY IS ABOUT FEEL GOOD

Although the cartoon above references a state level apology for slavery, the article below is about the recent apology for same from the United States Senate. Interestingly, the North Carolina incongruencies apply to this national folly as well.

While the Senate cries crocodile tears, no tangible measures of any kind are included in their apology, making it all a rather useless and silly exercise. The fact that they specifically excluded the use of their apology in subsequent legal proceedings relative to reparations speaks volumes as well about the intentions and the politics of the matter.

What this amounts to is typical leftist identify group pandering designed to make one of the Dem voting constituencies feel good while doing nothing whatsoever to improve their actual well being. The left has long been guilty of locking poorer black Americans into the downward spiral of generational welfare dependency all the while claiming to be helping them out. The truth is, they want them dependent on the Democrat party for their next welfare check. That way they can continue to lock in those voters by implying that a vote for anyone else will take away their government largess.

What is also revealing here is that in the midst of one of the worst economic downturns since the Great Depression, the United States Senate wastes it's time and attention on making apologies. Led by team Obama, the left has gone into a 24/7 apology mode since the November election. Yet even children come to realized that fluffy apologies which are not substantive are simply designed to make those apologizing feel better. It does noting for those that have been past victims of serious wrong.

Further, the evil of slavery (which still exists in the world today and about which the Senate is taking zero substantive or even superficial action) has been recognized and acknowledged as one of the great wrongs of human history since long before the Civil War.

Most importantly, of all the nations on earth, it was the United States government that took action to officially and forever abolish the slavery in our midst. President Lincoln emancipated the slaves. The 13th Amendment to our Constitution forever abolishes and prohibits slavery in this nation. And we fought a Civil War over the matter of slavery during which 620,000 Americans gave their lives. All of that counts a whole lot more than this milk toast apology from Senate politicians, none of whom were either slaves or slave owners.

On so many different levels, this Democrat driven Senate apology is more of an affront to black Americans than it is as anything meaningful or useful. It represents a handful of politicians making their best effort to look good in the eyes of a very specific voting group while doing absolutely nothing to improve their lot specifically of the national welfare generally.

Therein lies the most offensive aspect to this wasteful exercise. Today, as a nation, we face threats and difficulties on any number of important fronts. Were our Senators in fact dedicated to protecting and promoting the welfare of this country, they would drop these kinds of superfluous exercises and focus on the business at hand. We are at war. We suffer from economic chaos. We face growing nuclear threats from outlaw states and stateless terrorists. Health care is a major problem. Our infrastructure is falling apart. Government schools are in full failure mode. Unemployment grows daily. Our auto industry is in collapse. Our financial markets remain in peril. And the list goes on and on.

What does our elected "leadership" do in the face of all our difficulties? Spend what is valuable time on purely symbolic matters.

We really need to vote these people out of office.


Senate Backs Apology for Slavery Resolution Specifies That It Cannot Be Used in Reparations Cases
By Krissah ThompsonWashington Post Staff Writer

The Senate unanimously passed a resolution yesterday apologizing for slavery, making way for a joint congressional resolution and the latest attempt by the federal government to take responsibility for 2 1/2 centuries of slavery.
"You wonder why we didn't do it 100 years ago," Sen. Tom Harkin (D-Iowa), lead sponsor of the resolution, said after the unanimous-consent vote. "It is important to have a collective response to a collective injustice."
The Senate's apology follows a similar apology passed last year by the House. One key difference is that the Senate version explicitly deals with the long-simmering issue of whether slavery descendants are entitled to reparations, saying that the resolution cannot be used in support of claims for restitution. The House is expected to revisit the issue next week to conform its resolution to the Senate version.
Harkin, who called the Senate's vote an "important and significant milestone," said he wanted the resolution passed yesterday to closely coincide with Juneteenth, a holiday first celebrated by former slaves to mark their emancipation.
This recent willingness to deal with the nation's difficult racial history has come about in part because of President Obama's election, said Rep. Stephen I. Cohen (D-Tenn.), who began pushing for an apology more than a decade ago when he was a state senator and pronounced himself "pleased" with the Senate vote.
Still, Cohen said, "there are going to be African Americans who think that [the apology] is not reparations, and it's not action, and there are going to be Caucasians who say, 'Get over it.' . . . I look at it as something that makes people think."
Even among proponents of a congressional apology, reaction to yesterday's vote was mixed. Carol M. Swain, a professor of political science and law at Vanderbilt University who had pushed for the Bush administration to issue an apology, called the Democratic-controlled Senate's resolution "meaningless" since the party and federal government are led by a black president and black voters are closely aligned with the Democratic party.
"The Republican Party needed to do it," Swain said. "It would have shed that racist scab on the party."
Republicans, however, were supportive of the resolution. "It doesn't fix everything, but it does go a long way toward acknowledgment and moving us on to the next steps to building a more perfect union, doing the things that Martin Luther King would talk about, like building a colorblind society," said Sen. Sam Brownback (R-Kan.).
As with all congressional apologies -- but especially this one -- concerns about liability for restitution were part of the political calculations, in this case because of the long-running debate about whether the descendants of slaves should be compensated.
Charles Ogletree, the Harvard law professor who has championed restitution, was consulted on the Senate's resolution and supports it, but he said it is not a substitute for reparations. "That battle will be prolonged," he said.
Randall Robinson, author of "The Debt: What America Owes to Blacks," said he sees the Senate's apology as a "confession" that should lead to a next step of reparations. "Much is owed, and it is very quantifiable," he said. "It is owed as one would owe for any labor that one has not paid for, and until steps are taken in that direction we haven't accomplished anything."
Cohen said he and Harkin worked closely with the NAACP and other civil rights groups on language that would not endorse or preclude any future claims to reparations. "It will not harm reparations but won't give any standing to it," Cohen said.

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EUROPEANS UNDERSTAND WHAT THE LEFT NEVER LEARNED

Euro-socialists, who lost their way a long time ago and their power just recently, are now without portfolio across the pond. Europeans have come to understand the error of their ways and as the accompanying article chronicles, they know that wasteful "stimulus" spending is counterproductive to economic recovery.

Sadly, American socialists led by Obama and his leftist allies in Congress
neither understand nor care that their direction of choice will trap this country
in the economic doldrums Ala the Jimmy Carter days. For them, ideology trumps intelligence and wisdom.

It is beyond ironic that our Euro friends have grasped the obvious relative to the nationalization of free markets and the ill effects of politically motivated pork spending in the billions while here in the USA, arguably the headquarters of capitalism, the country is being driven into the ditch following the capture of the levers of governance by the left.

Over zealous government spending during the Great Depression and odious government regulation during the Carter recession proved beyond doubt that too much government interference in the free markets will hinder, delay, retard, postpone, slow and generally ruin economic recovery and well being. Such activity is the path of fools.

Obviously Europeans got hold of that reality much faster than their American cousins. They are already taking the initial steps required to back off from overspending and over regulation. They get it. We do not.

At least not in Washington DC, the new home of unsustainable spending and generational taxation. And not among leftists who cannot figure out how the world really works.


EU Sees Signs of ‘Sustainable’ Recovery, Seeks Exit Strategy
By Jonathan Stearns and James G. Neuger

June 19 (Bloomberg) -- European Union leaders spotted the first signs of a “sustainable economic recovery” from the worst recession since World War II and started planning to roll back budget deficits piled up to combat the financial crisis.
The 27 government heads today said the looming end of the slump means it is time to start hatching an “exit strategy.” They also agreed to overhaul financial regulation after banking supervision failed to contain the crisis sparked in the U.S. housing market.
“It is important that consolidation keeps pace with economic recovery,” the leaders said in a statement after a two-day summit in Brussels. “There is a clear need for a reliable and credible exit strategy.”
The EU leaders’ outlook is more upbeat than that struck last week at a meeting of Group of Eight finance ministers, which ended with a statement noting “signs of stabilization in our economies.” U.S. Treasury Secretary Timothy Geithner said at those talks that “it’s too early to shift toward policy restraint.”
The expression of official optimism pushed the euro higher and prompted declines in European government bonds. The currency was up 0.1 percent at $1.3909 at 4:15 p.m. in Brussels.
Extra spending by European governments will pump 5 percent of gross domestic product into the 27-nation economy in 2009 and 2010, helping restore growth after this year’s estimated 4 percent contraction, according to EU forecasts. “The significant measures taken by governments and central banks are contributing to limiting the negative effects of the downturn and helping to safeguard jobs,” according to the statement.
Credit Crisis
The leaders agreed to their most sweeping overhaul of financial regulation, sharpening scrutiny of banks and risks after spending billions propping up lenders in the credit crisis. They backed the creation of agencies to unify oversight of banks, insurers, investment firms, credit-rating companies and hazards in the broader economy.
The accord gives the EU its most centralized power over financial firms even after U.K. Prime Minister Gordon Brown won a compromise to scale back some of the authorities’ power to override national decisions involving public money. The region’s governments and central banks are on the hook for more than 3.7 trillion euros ($5.2 trillion) of guarantees and funding.
Concerned that Britain’s economy might need another shot in the arm, Brown objected to a draft text that said “further budgetary stimulus would not be warranted” and got the phrase expunged from the final communiqué.
Budget Deficits
German Chancellor Angela Merkel has pushed for governments to start cutting budget deficits, which will rise to an average of 6 percent of GDP in 2009 from 2.3 percent last year, the EU forecasts. Economic data released this month suggest the region is starting to pull out of the slump.
In Germany, Europe’s largest economy, investor sentiment rose more than economists forecast to a three-year high this month, the ZEW Center for European Economic Research in Mannheim said this week. Euro-area business and consumer confidence increased to the highest in six months in May, and the service and manufacturing industries contracted at a weaker pace.
The International Monetary Fund, the Washington-based lender with 185 member nations, raised its forecast for global economic growth in 2010 to 2.4 percent from 1.9 percent, a person familiar with the matter said on June 11. John Lipsky, the IMF’s first deputy managing director, said today that the fund expects to revise its growth forecasts “modestly upward” to reflect signs that the global slowdown is moderating.
Economic Growth
Underscoring investor expectations of a revival in economic growth, Europe’s Dow Jones Stoxx 600 Index gained 0.9 percent to 207.55. The MSCI World Index of developed-nation stocks has added 40 percent since March 9 and crude-oil futures have jumped 61 percent this year.
Taylor Wimpey Plc, the U.K.’s largest homebuilder, said today that its British order book surged 73 percent from the end of last year as buyers returned to the housing market and prices stabilized. Praktiker AG, Germany’s second-biggest home- improvement retailer, said on May 27 that revenue has rebounded in its domestic market since the end of March.
Still, other data suggest the recovery is fragile and uneven. Retail sales in the U.K., Europe’s second-biggest economy, unexpectedly dropped in May for the first time in three months, the Office for National Statistics said today.
Coming economic “data will most likely be mixed, confirming that activity is stabilizing at a very low level,” said Marco Annunziata, chief economist at Unicredit MIB in London. The reports are “unlikely to give unequivocal support to the idea of a strong V-shaped recovery, especially given the residual fragility of the financial sector.”

To contact the reporters on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net; James G. Neuger in Brussels at jneuger@bloomberg.net.

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DEMOCRAT CONGRESS PUTS AGENDA OVER THE GREATER GOOD

The world "quickly" in the headline of the article below represents a red flag warning to the American public. When the Democrat Congress declares that the government must move quickly to achieve something, that amounts to code that means their agenda is once again being pushed ahead of the national welfare.

Keep in mind these are the same people that told the world that the "stimulus package" passed earlier this year absolutely had to be rushed forward for passage the minute it emerged from behind their partisan curtain. According to them, that $787 billion appropriation had to be immediately voted on to save the nations economy. It was so important that they would not allow time for members to even read the bill before voting. It had to be rushed to the President's desk for signature (who, by the way, left town and ended up signing the bill the following week. So much for an emergency!).

What have we learned about that "stimulus" bill? Well...
-So far, only 5% has actually been spent;
-Most of it amounts to pork projects and political payback to Dem supporters;
-The money has already been admittedly subject to waste and fraud;
-The expense has helped lead to the largest deficit and largest debt load in American history which will become a generational tax burden.

Thus the actual English translations of the need to get it done quickly: it was not only completely unnecessary, it was wrong headed, self-serving and further injurious to our economy. That is what "quickly" really means in Democrat speak.

So when an article like this one comes along insisting that regulatory legislation must be passed quickly, BEWARE. It means just the opposite. Quickly in their language means 'to do damage'. Pass it quickly and you can expect that it will hurt our already staggering economy and do untold damage in the longer term.

This represents a further power grab by the left in their ongoing and so far largely successful back room plan to remake America to fit their Euro-socialist, largely Utopian agenda. Virtually nothing that they have done so far in 2009 has proved helpful to or will improve this recession.

We are in a replay of FDR's government driven extension of the Great Depression and Jimmy Carter's foolish and destructive policy led recession of the late 1970's.

Never trust a fools failed track record. They proved wrong before and they are repeating the history they have failed to learn.


Dems work to push banking overhaul quickly
By ANNE FLAHERTY and JIM KUHNHENN

WASHINGTON (AP) - President Barack Obama's plan to transform the Federal Reserve into a super-regulator ran into skepticism Thursday from lawmakers who worry that the central bank is not the best suited to keep an eye on firms deemed so big and influential that their demise could hurt the economy.
Democrats and Republicans voiced misgivings as Treasury Secretary Timothy Geithner began a marathon day of selling Obama's financial regulatory plan to give the Fed more authority, create a new consumer protection agency and bring unregulated sectors of the financial markets under government oversight.
"I do not believe that we can reasonably expect the Fed or any other agency to effectively play so many roles," said Sen. Richard Shelby, R-Ala., noting that it also sets monetary policy, regulates banks and handles an array of other functions.
Some lawmakers have called for a council of regulators, not a single agency, to oversee and regulate large institutions.
The administration did propose a council to watch for products and trends that could pose widespread risks, but chose not to give it regulatory power to supervise specific institutions.
"You cannot convene a committee to put out a fire," Geithner said.
Sen. Mark Warner, D-Va., argued that a council represented by the Fed, the Treasury and regulators could be better equipped than the Fed alone to recognize and act on institutional risks that could harm the financial markets.
"I don't believe it would have to be a debating society," he said, adding that the council proposed by the administration is "emasculated."
Committee Chairman Christopher Dodd, D-Conn., also raised questions about the use of the Fed for such an overarching task over the financial system and blamed it for "dropping the ball" on consumer protections. But he applauded the administration for including a new agency to protect consumers in their banking transactions.
Noting that banking interests already are criticizing the new agency, Dodd said: "The very people who created the damn mess are the ones now arguing that consumers ought not to be protected."
Geithner said that in setting up the consumer protection agency, the administration was taking power away from the Fed even as it was adding to its authority.
"That is a substantial diminishment of authority, preoccupation and distraction," he said.
It is likely the Fed itself will mount a defense to keep its consumer oversight duties. Fed officials believe their oversight of mortgages, credit cards and other products fits well with their duties to regulate banks, and that they have the right mix of experts—economists and lawyers—already on hand to do the job.
However, the Fed's failure to crack down on shady mortgage practices during the housing boom has irked Congress and consumer groups. So has its decision not to speed up implementation of new rules providing consumers with better protections from abusive credit card practices.
Democrats and Republicans challenged Geithner on other details of the plan. Democratic Sens. Charles Schumer of New York and Jon Tester of Montana pressed Geithner to explain why the administration did not seek greater consolidation of regulatory agencies.
"A multiplicity of regulators tends to produce less oversight overall," Schumer said.
Geithner conceded the regulatory system is not ideal. But he said it was not necessary to streamline the system to address the financial crisis that hit Wall Street, and he suggested it would have been a politically difficult task.
"We did not want to put you in a position of having to spend a lot of time on changes that may be desirable, that may leave us with a neater system, maybe a more efficient system, but were not central to the cause of the problem," he said.
The Senate hearing also revealed philosophical cracks between lawmakers who believe the Fed is too independent and those who believe the Obama plan diminishes its independence.
Several lawmakers said they were taken aback by a proposed administration requirement that the Treasury approve emergency loans from the Fed to a troubled financial institution. The Fed can now take such emergency steps on its own.
"All of a sudden the Fed is acting more like a department of the government than an independent bank," said Sen. David Vitter, R-La.
Sen. Bob Corker, R-Tenn., cheekily asked Geithner whether the administration would assure Congress in writing that no one at the White House or in the administration involved in creating the regulatory plan would be in the running to be a new Fed chairman. Corker seemed to have in mind Obama's top economic adviser, Lawrence Summers, who is often mentioned as a potential successor to Fed Chairman Ben Bernanke, whose term expire at the end of next January.
"No," Geithner replied. "I don't think that would be appropriate, nor do I think it would be necessary." Then he added: "I think you expected that answer, senator."
Geithner was to testify in the afternoon before the House Financial Services Committee.
A swift legislative endorsement of the plan could be difficult. Dodd is leading a major overhaul of the nation's health care system and the Senate also faces a debate on whether to confirm Supreme Court nominee Sonia Sotomayor.

Copyright 2009 The Associated Press.

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INSULT AND DEMEAN: COMMON PRACTICE OF THE LEFT

The short article below mentions a common tactic used by Barack Obama to address his critics: negative labeling and name calling. It is what those on the left do all the time.

Why? Any number of reasons including the following.

1. Those on the far left tend to be unhappy human beings. They view the world through a glass darkly. Something to be aggressively attacked and put down. Since it is generally how they view themselves, it is how they view everything and everyone else.

2. It is far easier to belittle and demean than it is to present intelligent counter argument, especially if there is none. Making fun of an opponent comes natural to pessimists and those who see themselves as less worthy. Put downs are most often simply a reflection how one values their own existence. (Think David Letterman)

3. In the case cited below, Obama has gone into protective reaction mode as he encounters opposition to his health care plan. Name calling and labeling is his form of self-defense relative to the arguments against his position. In one of the great counter intuitive moves of his presidency, he attempts to scare the public into stampeding to his position by claiming that his opponents are fear mongering.

4. The more vitriol the left interjects into the consideration of an issue, the more desperate their position appears to become. Wild raging not only leaves the impression that there is no argument to be made, it indicates the unhinged nature of those who lose control when they begin to understand that they will lose the argument. (e.g. Bush is a: Nazi, war criminal, dunce, etc.)

5. When there is nothing of substance to say, call others names as a means of self-reinforcement. That is the practice and the mantra of the left.

Note that when Obama turns to name calling, as he often does, it is because he has nothing convincing to say, not to mention he is off the prompter and speaking from his heart.

Not very presidential.


Obama hits 'fear-mongering' on health care changes

CHICAGO (AP) - Pushing again to get the health care system overhauled, President Barack Obama is arguing that people must beware of "scare tactics and fear-mongering" that have killed such efforts in the past.
Obama said "we know there are those who will try to scuttle" the program no matter what. He said that "because these fear tactics have worked, things have kept getting worse."
One such "scare tactic" the president cited Monday was an assertion that he favors socialized medicine. Obama again denied that, although he did say he thought that a "public option" should be available as a choice for those who currently have no insurance coverage. Obama said "we know the moment is right," citing the passage of legislation giving the government unprecedented control of the marketing and sale of cigarettes.

Copyright 2009 The Associated Press

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THE EVER WATCHFUL IAEA FINALLY DISCOVERS THE OBVIOUS

See the article below for further proof that the UN (Useless Nothings) serves virtually no verifiable purpose in the modern world.

IAEA Director ElBaradei, another highly reputed international sophisticate, has announced that he and his agency have discovered that Iran seeks a nuclear weapon. What the rest of the world has known for years has finally permeated the very well educated yet impractical skull of this outstanding servant to the world. What a dolt.

As one might expect, the American left loves this guy. They hang on his every declaration and they believe his every word on matters atomic on this planet. The fact that he is rarely correct and most often ends up as the 'Johnny come lately' to the realities of life makes not one wit of difference to leftists. After all, ElBaradei represents the cream of the international elite and has to be in the know because he is so nuanced, suave and multi-cultural.

Yet he failed to grasp what the everyday man and woman on the street has understood for quite some time now. Clearly and without doubt, the Iranians have long been in pursuit of the development of nuclear weapons. Their evil, outlaw, terrorism promoting theocratic totalitarian regime wants WMD in order to destabilize the Middle East and wipe Israel off the face of the map. Not to mention threaten us. They have made no secret of that fact but the ever proficient IAEA could not figure that out until just now.

That speaks volumes about the value of the UN and it screams loudly about the agenda of the IAEA and ElBaradei. UN headquarters should move to Vienna, the IAEA should be dissolved and ElBaradei ought to be put out to pasture.

The world would be better off without this circus and this clown.


Iran seeking nuclear weapons technology: ElBaradei
By Mark Heinrich and Sylvia Westall

VIENNA (Reuters) - Iran wants the ability to build nuclear weapons to gain the reputation of a major power in the Middle East, the head of the U.N. nuclear watchdog said in a BBC interview broadcast on Wednesday.
Tehran denied the assertion. But International Atomic Energy Agency Director-General Mohamed ElBaradei told Iran at an IAEA meeting that it would not be trusted unless "you go the extra mile" and lift restrictions on U.N. inspections.
Iranian President Mahmoud Ahmadinejad's disputed re-election last week has cast doubt on Western powers' hope of a dialogue with Iran aimed at curbing its uranium enrichment program, which Iran says is for generating electricity only.
ElBaradei said the Islamic Republic sees a nuclear breakout ability as an "insurance policy" against perceived threats from neighboring countries or the United States.
"My gut feeling is that Iran definitely would like to have the technology ... that would enable it to have nuclear weapons if they decided to do so," he told the BBC.
The enrichment process can be configured to produce fuel either for nuclear power plants or weapons.
"(Iran) wants to send a message to its neighbors, it wants to send a message to the rest of the world: yes, don't mess with us, we can have nuclear weapons if we want it," said ElBaradei.
"But the ultimate aim of Iran, as I understand it, is that they want to be recognized as a major power in the Middle East and they are. "This is to them the road to get that recognition to power and prestige and ... an insurance policy against what they heard in the past about regime change, axis of evil."
"He's absolutely wrong. We don't have any intention of having nuclear weapons at all," Iranian ambassador Ali Asghar Soltanieh told an impromptu news conference outside a meeting in Vienna of the IAEA's 35-nation governing body.
NOT IN IRAN'S DOCTRINE
"Nuclear weapons are not in our defense doctrine. We do not consider nuclear weapons any advantage ... we will never have (them). But we are going to have nuclear technology for peaceful purposes ... We will continue fuel cycle activities without any interruption because Iran has a legitimate need."
Soltanieh said Iran had mastered enrichment technology and Western powers "should cope with this reality. They are unhappy about these facts? It is their problem, it is a reality."
In an apparent slip-up during his exchange with reporters, Soltanieh said, in English: "There is no difference between any factions or groups of the Iranian nation on the inalienable right of nuclear weapons."
Pressed by Reuters in a phone call afterwards to clarify his remark, he said: "I said our peaceful uses of nuclear energy ... and of course our condemnation of nuclear weapons."
The United States told the IAEA's governing board Iran now appeared to be in the position to "weaponize" enrichment.
"Iran is now either very near or in possession of sufficient low-enriched uranium to produce one nuclear weapon, if the decision were made to (further) enrich it to weapons-grade," U.S. envoy Geoffrey Pyatt said.
To do that, Iran would have to adjust its enrichment plant to yield bomb-ready nuclear fuel and miniaturize the material to fit into a warhead -- technical steps that could take from six months to a year or more, nuclear analysts say.
Ahmadinejad indicated on Sunday nuclear policy would not change in his second term since the issue "belongs in the past."
ElBaradei rejected this stance. Gazing at Soltanieh in the 35-nation IAEA governors meeting, he said: "If you want to build confidence, you would do (wide-ranging snap inspections). You have to help me... (Otherwise), you are penalizing yourself."
ElBaradei also bemoaned the IAEA's inability to enforce transparency in suspect countries. "We are called the watchdog but we don't bark at all if we do not have the authority."
Six world powers have offered Iran trade and other incentives to halt enrichment. Iran has not engaged the offer and says its enrichment program is non-negotiable.

(Additional reporting by Peter Griffiths in London; Editing by Richard Balmforth)
© Thomson Reuters 2009

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AMERICA: AN ANTI-LEFT NATION

Thanks to the Gallup poll story that follows, we now can all understand why the far left hates America.

According to the polling, a full 75% of the people of this nation identify themselves either as conservative (40%) or moderate (35%). Those self-identifying as liberal, which includes the far left but is not entirely composed of such radicals, is a paltry 21%.

No wonder the left is so unhappy, nasty, dishonest, conniving, virulent and angry. More than three out of every four people disagree with their radical Utopian agendas. How frustrating!

What great news!

So, given the results of our most recent presidential election and our current Euro-socialist direction going forward, what do such poll results tell us.

1. In that election, a lot of conservatives stayed home and a lot of moderates voted for Obama. In growing numbers, both groups are starting to understand the error of their ways.

2. Although in office a mere six months, Obama is starting to feel the ever increasing resistance to his clearly socialist leaning and Utopian policies both at home and abroad.

3. Most Americans remain fiscally conservative and socially moderate. Anyone seeking high office must find a way to appeal to that demographic more successfully than their opponents.

4. A nation that is 75% moderate to conservative is not going to tolerate Euro-socialism to any great degree or for any extended period of time.

5. Political parties must keep the enthusiastic support of their base and make a strong, attractive appeal to moderates. Should that be the case and should, hypothetically, each of the two major parties split moderates down the middle, Republicans would gain about 57% of the vote and Democrats about 38% of the vote in any national election. The question is, can either party make a convincing case.

6. The increasing political reality in this country is that people are far more likely to categorize themselves somewhere on the conservative to liberal spectrum than they are to call themselves Republicans or Democrats. The days of pure party loyalty have been fading fast, and none too soon. Each and every day finds fewer party agenda kool aid drinkers on either side of the political divide. That works, not to mention that there is no need for a third party. Or better put, there already is a third party: the nonpartisans. And it is growing. To win, the party types will have to attract large numbers of the non-affiliated while at the same time holding on to their party base. Fascinating challenge, not to mention healthier for the nation.

7. One thing our current governance reality confirms: uni-party government is dangerous and destructive. One party in charge of both sides of Congress and of the White House is counterproductive to the greater good of the nation in the extreme. This is a mistake that we the people cannot make again going in either direction, left or right.

8. As to the numbers relative to age groups in the Gallup poll. Younger people tend by definition to be more liberal than older people. Such has almost always been the case, as older people often attest. There are two primary reasons for that reality.

First, younger people are far more subject to outside influence as they try to find their way in life. They naturally rebel against their more often than not conservative leaning parents while at the same time spending most of their time in a system of education that runs decidedly to the left. Both of those realities make for a powerful force in their extremely malleable world where they have yet to really begin to think independently.

Second, younger people pretty much have nothing to conserve. It is only as they age and mature, start families, buy a home, pay their own expenses and taxes and begin to invest for the future that they also move more toward the conservative side of the political equation. Having something to conserve, that they have earned themselves, does make a real difference.

Have you ever noticed that those in the far left are often either the beneficiaries of family wealth or very poor? Neither group has any sweat equity in the future and neither group has to worry about anything to conserve. America's home grown anarchists come primarily, although not exclusively, from these two demographics.

9. Finally, don't expect Latinos to morph into leftists. As a group, they tend to be hard working, family oriented, church going people which is not the profile of those on the far left. Like 75% of Americans, Latinos fall into that conservative/moderate group and are also up for grabs when election time rolls around.


“Conservatives” Are Single-Largest Ideological Group
Percentage of “liberals” higher this decade than in early ’90s
by Lydia Saad

PRINCETON, NJ -- Thus far in 2009, 40% of Americans interviewed in national Gallup Poll surveys describe their political views as conservative, 35% as moderate, and 21% as liberal. This represents a slight increase for conservatism in the U.S. since 2008, returning it to a level last seen in 2004. The 21% calling themselves liberal is in line with findings throughout this decade, but is up from the 1990s.
These annual figures are based on multiple national Gallup surveys conducted each year, in some cases encompassing more than 40,000 interviews. The 2009 data are based on 10 separate surveys conducted from January through May. Thus, the margins of error around each year's figures are quite small, and changes of only two percentage points are statistically significant.
To measure political ideology, Gallup asks Americans to say whether their political views are very conservative, conservative, moderate, liberal, or very liberal. As has been the case each year since 1992, very few Americans define themselves at the extremes of the political spectrum. Just 9% call themselves "very conservative" and 5% "very liberal." The vast majority of self-described liberals and conservatives identify with the unmodified form of their chosen label.
Party-Based Ideology
There is an important distinction in the respective ideological compositions of the Republican and Democratic Parties. While a solid majority of Republicans are on the same page -- 73% call themselves conservative -- Democrats are more of a mixture. The major division among Democrats is between self-defined moderates (40%) and liberals (38%). However, an additional 22% of Democrats consider themselves conservative, much higher than the 3% of Republicans identifying as liberal.
True to their nonpartisan tendencies, close to half of political independents -- 45% -- describe their political views as "moderate." Among the rest, the balance of views is tilted more heavily to the right than to the left: 34% are conservative, while 20% are liberal.
Gallup trends show a slight increase since 2008 in the percentages of all three party groups calling themselves "conservative," which accounts for the three percentage-point increase among the public at large.
Thus far in 2009, Gallup has found an average of 36% of Americans considering themselves Democratic, 28% Republican, and 37% independent. When independents are pressed to say which party they lean toward, 51% of Americans identify as Democrats, 39% as Republicans, and only 9% as pure independents.
Ideological tendencies by leaned party affiliation are very similar to those of straight partisan groups. However, it is worth noting the views of pure independents -- a group usually too small to analyze in individual surveys but potentially important in deciding elections. Exactly half of pure independents describe their views as moderate, 30% say they are conservative, and 17% liberal.
As reported last week on Gallup.com, women are more likely than men to be Democratic in their political orientation. Along the same lines, women are more likely than men to be ideologically "moderate" and "liberal," and less likely to be "conservative."
Still, conservatism outweighs liberalism among both genders.
The pattern is strikingly different on the basis of age, and this could have important political implications in the years ahead. Whereas middle-aged and older Americans lean conservative (vs. liberal) in their politics by at least 2 to 1, adults aged 18 to 29 are just as likely to say their political views are liberal (31%) as to say they are conservative (30%).
Future Gallup analysis will look at the changes in the political ideology of different age cohorts over time, to see whether young adults in the past have started out more liberal than they wound up in their later years.
Bottom Line
Although the terms may mean different things to different people, Americans readily peg themselves, politically, into one of five categories along the conservative-to-liberal spectrum. At present, large minorities describe their views as either moderate or conservative -- with conservatives the larger group -- whereas only about one in five consider themselves liberal.
While these figures have shown little change over the past decade, the nation appears to be slightly more polarized than it was in the early 1990s. Compared with the 1992-1994 period, the percentage of moderates has declined from 42% to 35%, while the percentages of conservatives and liberals are up slightly -- from 38% to 40% for conservatives and a larger 17% to 21% movement for liberals.
Survey Methods
Results are based on aggregated Gallup Poll surveys of approximately 1,000 national adults, aged 18 and older, interviewed by telephone. Sample sizes for the annual compilations range from approximately 10,000 to approximately 40,000. For these results, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Copyright © 2009 Gallup, Inc.

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