Obama Sellout To China

AFP/Getty Image

In this Wall Street Journal article Sharon Terlep tells us that China plans to buy a 4% stake in the newly issued shares of GM(Government Motors).

NEW YORK—In a sign of the changing fortunes of the world's top two economies, China's biggest auto maker, SAIC Motor Corp., is negotiating to acquire a stake of about 1% in General Motors Co. worth about $500 million, according to a person familiar with the matter.

The U.S. auto maker also is prepared to sell more than $1 billion worth of shares to sovereign wealth funds in the Middle East and Asia. Combined, the sales would give foreign investors roughly 16% of the shares to be sold next week under an initial public offering of stock, and give them a stake of some 4% in the Detroit auto maker. GM declined to comment on the investment talks.

The issue of overseas investors buying GM shares in the company's IPO has been a sensitive one for the U.S. government, which plans to reduce its 61% stake in the auto maker to around 35% through the IPO.

The investment in GM by government-owned SAIC would be the latest in string of deals giving Chinese companies stakes in big-name Western companies. In 2007. China's sovereign wealth fund, China Investment Corp. took a 9.9% stake in securities firm Morgan Stanley. Pacific Century Motors recently took over GM's former steering unit, now called Nexteer, and Shougang Corp. bought Delphi Corp.'s brake unit.

The U.S. Treasury has to walk a fine line. Attracting foreign investors will be a key to pulling off a listing of this size. But the Treasury has also had to weigh the possible political outcry if investors abroad are allowed to acquire a significant stake in GM, after U.S. taxpayers spent $50 billion to carry the company through bankruptcy reorganization, people familiar with the matter have said. The Canadian government also helped bail out GM, which has operations in Ontario.

In a previous article written November 2, 2010 by Terlep she told us that the government will lose money on its intial offering.

The initial public offering plan envisions the shares would be priced at $26 to $29 each, these people said. The actual price of the stock to be sold in the IPO would be set about Nov. 17, and the sale would take place the following day.

But for the U.S. to break even through sales of the rest of its stake, the share price may need to rise more than 60% from its initial level, to about $50.

The Obama administration is seeking to recoup the $49.5 billion that taxpayers poured into GM. Critics refer to the company as "Government Motors," and the U.S. ownership stake has tainted the company in the eyes of some potential car buyers.

GM last week returned $2.1 billion to the U.S. government, bringing the total amount it has handed back to $9.5 billion, through loan repayments, interest payments and dividends, the Treasury said.

It appears the Obama administration is helping the Chinese make a quick buck on the taxpayers dime. It's not like the government was having a problem selling shares of the new IPO.

Reuter's reports that there are $60 billion dollars worth of orders for the new shares, six times the amount it intended to raise.

NEW YORK, Nov 12 (Reuters) - General Motors Co's [GM.UL] landmark initial public offering has already garnered $60 billion in orders, six times the amount it had planned to raise, in a sign of healthy investor interest for the massive automaker that was in desperate straits just over a year ago.

Just over a year after a politically unpopular $50 billion bailout that left the U.S. Treasury with a 61 percent stake, GM filed to sell about $10 billion worth of common stock and $3 billion of preferred shares. Such an offering would mark the second-biggest U.S. IPO ever after Visa Inc (V.N) and one of the largest, globally.

The full overallotment could take the total IPO amount to as much as $15.65 billion. It would also cut the U.S. Treasury's stake to just over 40 percent.

Pricing at the top end of the range would value GM at $43.6 billion based on 1.5 billion common shares. Assuming exercise of warrants that are in-the-money, the share count jumps to 1.8 billion and GM's value rises to more than $52 billion.

For U.S. taxpayers to break even, GM needs a market value of roughly $70 billion.

Rick Santelli Smokes Kanjorski

Given the fact that Fannie Mae and Freddie Mac had to delist their stocks on the NYSE I thought this video to be appropriate to show how Kanjorski tries to peddle his wheelbarrow full of weeds. Hear what Kanjorski says.

"I say that we are including them in the reform, that's another misnomer, we're going to do Fannie and Freddie reform its just that we cant do it in this present bill, we don't have the time and the effort.... It has nothing to do with the election."

Fannie Mae and Freddie Mac Delist Shares On NYSE

Fannie Mae and Freddie Mac were featured in this article about how much money they invested in Democrats including Congressman Paul Kanjorski.

Rep. Paul Kanjorski (D-Pa.) has received $65,500. Kanjorski chairs the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, and Freddie Mac and Fannie Mae are government-sponsored enterprises, or GSEs.

Today the mortgage giants own or guarantee almost 31 million home loans worth about $5.5 trillion representing almost half of the mortgages. The twins were ordered by their federal regulator to no longer trade their shares on the New York Stock Exchange.

The Federal Housing Finance Agency (FHFA) and its predecessor agency have overseen the operation of Fannie Mae and Freddie Mac since September 2008, when they were both placed under conservatorship, a form of control similar to what is found in a bankruptcy process.

Since that time, the Treasury Department has poured $83.6 billion into Fannie Mae and $61.3 billion into Freddie Mac to cover losses on the trillions of dollars worth of mortgage-backed securities they own or guarantee.

Billions of additional losses are forecast in coming years, with the Congressional Budget Office estimating that nearly $400 billion in tax dollars will eventually be needed. The government controls the majority of the shares of each firm. Not a bad return on a $65,000 investment.

So far, taxpayers have poured $145 billion into Fannie and Freddie to keep them afloat and to buoy the overall housing market.

Fannie Mae, Freddie Mac, the FHA and the Veterans Administration backed nearly 97 percent of home mortgages in the first quarter of this year, according to trade publication Inside Mortgage Finance.

How Paul Kanjorski, Nancy Pelosi And Harry Reid Spent Our Money On TARP- $24 Trillion Dollars

From Judicial Watch-A Financial Comparison"

The government economic bailout altered the role of the Federal Reserve and the government's relationship with private enterprises. Schooled in the Great Depression, Fed Chairman Bernanke feared a repeat and wielded unchecked power. Many question Bernanke's fear of "contagion" (i.e. the spreading of bank disaster) and the long-term effects of unchecked Fed power. Paying the bill ultimately rests with the taxpayers. When trillions of dollars are pumped into institutions that would have otherwise gone bankrupt, the significance of not only the action, but its magnitude are hard to comprehend.

Judicial Watch's table puts into perspective the magnitude of bailout spending. To provide a scale of comparison, Judicial Watch presents numbers to connect expense with the perspectives of individual short-term, individual longer-term, and a nationwide short-term focus. How does one comprehend a trillion dollars? Much less $24 trillion? To note, the numbers are not transparent. Various sources provide different estimates. We have compiled numbers from a variety of sources including CNNMoney, the Federal Reserve, Department of Treasury, etc. The bailout is constantly evolving and so we focus on the money committed rather than spent. These commitments, however, can also change, and programs can be created instantaneously with unprecedented Fed power. The estimated worst case scenario is that the bailout will cost the American people nearly $24 trillion. Explore the table and you will find relevant news articles, links to Judicial Watch's investigations and lawsuits, and relevant comparisons.

No wonder Paul Kanjorski enjoys taking all that money from the banking industry and Freddie and Fannie.

To put a trillion dollars into perspective if one stacked one dollar bills one at a time on top of each other a trillion dollars would rise 68,000 miles into the air or one third of the distance from the Earth to the Moon. Just like Robin Williams in his history on golf "Do you do this one time? Heck no 24 trillion fn times!!! And they blasted Bush for $700 billion dollar deficit???

CNBC’s Rick Santelli Rips Kanjorski For Ignoring Fannie/Freddie Reform

From 1989-2008 Paul Kanjorski received $65,500.00 from Fannie Mae and Freddie Mac. Paul, it wasn't "too complicated" for you to take their money now was it?


Press release from House Republican Leader John Boehner

Washington, May 11 - Follow @GOPLeader on Twitter for updates..

Democrats still don’t get it, and they refuse to reform Fannie Mae and Freddie Mac, the government mortgage companies that sparked the meltdown by giving high-risk loans to people who couldn’t afford it. Standing up for American taxpayers, CNBC’s on-air editor, Rick Santelli teed off on Rep. Paul Kanjorski’s (D-PA) claim that Democrats’ couldn’t reform Fannie & Freddie in their financial regulation bill because it was “too complicated,” asking: “It’s too complicated? You think taxpayers that go to work to pay the money you are subsidizing, it will end up a half a trillion, do you think they think complicated is an excuse?"

The exchange couldn’t have come at a worse time for Rep. Kanjorski and Congressional Democrats, because Fannie and Freddie simply won’t go away. As the Financial Times reported today:

“Fannie Mae said on Monday it would need an additional $8.4bn in aid, as the US government-controlled mortgage finance company continued to suffer heavy losses on its bad loans…Fannie Mae’s appeal for help comes on the heels of a similar plea last week by smaller rival Freddie Mac, which asked for an additional $10.6bn cash infusion. The latest requests for aid bring the total amount of taxpayer dollars drawn down by these companies to $148bn since the 2008 government-led bail-out.

“Anthony Sanders, a senior scholar at the Mercatus Center at George Mason University, called Fannie and Freddie ‘our own Greek tragedy.’ Mr. Sanders estimated that total taxpayer liability was about $8,000bn for the combined companies, including public debt and loan guarantees.”

But the unlimited bailout that the Administration has bestowed on Fannie and Freddie doesn’t seem to bother Democrats, though the latest giveaway may come at an “inconvenient time,” as the New York Times noted today:

“Fannie Mae’s request on Monday for another $8.4 billion in federal aid comes at a politically inconvenient time for the Obama administration, which is pressing to pass sweeping financial legislation without resolving the company’s future…. Democrats want to defer an overhaul of federal housing policy until next year, after the midterm elections. But Republicans have seized on the continuing losses to argue that a plan for the two companies should be a priority of the current legislation.”

Republicans have been pressing for an end to bailouts that would get the government out of the mortgage business once and for all. But Democrats are not only unwilling to reform Fannie and Freddie, they are doubling down on the failed government mortgage companies – burning through hundreds of billions of taxpayer dollars in the process. As the Washington Post noted in a report today: “Under the terms of the government's 2008 emergency takeover of Fannie and Freddie, the Treasury must pump money into either firm whenever its worth, as measured by assets minus liabilities, goes into the red. Late last year, the Obama administration pledged unlimited backing.”

For years, Republicans raised red flags about Fannie and Freddie’s financial condition and proposed responsible reforms only to be thwarted by Democrats who have deep political ties to the worst offenders. These same powerful Democrats are now pushing for a financial reform bill that doesn’t even address the need to fix these government mortgage companies. As the Wall Street Journal wrote last week, “reforming the financial system without fixing Fannie and Freddie is like declaring a war on terror and ignoring al Qaeda.”

House Republicans’ plan would phase out taxpayer subsidies of Fannie Mae and Freddie Mac over a number of years and end the current model of privatized profits and taxpayer losses. Find out more by clicking HERE.

Bloomsburg Press Enterprise Editorial On Paul Kanjorski And Special Interests

BLOOMSBURG PRESS-ENTERPRISE
Thursday, May 6, 2010
Editorial

Who's buying our congressman?

Out-of-state interest

The old joke goes like this: "We've got the best lawmakers money can buy!"

Well, if you never thought that was funny, you certainly won't laugh at this: They're now being bought by people who don't even live here.

Exhibit A is our man in Congress, Democrat Paul Kanjorski.

Officially, he represents the people of northeast Pennsylvania. However, 57 percent of personal contributions to his re-election campaign are coming from outside the state, according to data compiled by the Center for Responsive Politics, which tracks political finances.

It's hard not to wonder: Who are these folks so interested in the re-election of our Congressman?

No other member of Pennsylvania's congressional delegation even comes close to matching Kanjorski's popularity among people who don't live in Pennsylvania.

As a 13-term incumbent, Kanjorski is a key figure on a House committee that oversees regulation of financial services. To put that another way, he's someone to whom people and financial institutions with big money want access.

Keeping this in mind, consider what reporter Eric Boehm of the Pennsylvania Independent discovered when he took a closer look at Kanjorski's donors:

"... Mr. Kanjorski's ... funds come from 30 different states. During the current election cycle, he has received more than $46,000 from people in New York and more than $34,000 from people in Washington, along with donations from as far away as Ogden, Utah, and San Diego. ... Of his $116,000 in contributions from inside Pennsylvania, nearly $70,000 has come from Philadelphia and Pittsburgh combined, and neither of those cities are part of Mr. Kanjorski's congressional district."

In the popular imagination, it's the Republican lawmakers who live off the lint in the pockets of the monied interests.

Either Kanjorski is an exception to the rule, or the rules have changed. Lucky us.

If it's any consolation – and, in truth, it's not – our guy in Washington is not the only one being bought by interests outside of his district and the state.

"All told, Pennsylvania's 18 incumbent U.S. representatives have collected more than $1.68 million from out-of-state individual contributions during this election cycle ..." the Pennsylvania Independent found.
Forget the honest, principled Jimmy Stewart in "Mr. Smith Goes to Washington."

Big-time electoral politics today is more like a loud, garish, 3-D summer blockbuster, with the hidden producers putting up big dollars to re-hire proven actors, the incumbents.

As for the actual voters back home whom the members of Congress purport to represent? Mere extras.

Is it any wonder that, for most people, interest in politics and trust in government are at or near historic lows?

Paul Kanjorski Bailed Out His Wall Street Friends

How can Paul Kanjorski make us believe he will hold Wall Street accountable when he is so beholden to them.

The Wizard Of Wall Street

Fannie and Freddie's End Run With Our Money

Does anyone in this administration have a clue?

Read the article about Fannie Mae and Freddie Mac. Are you getting taken care of by the goverment like this??

Obama- Explain This Professor's View

A Professor's View of Obama

HISTORY ALWAYS REPEATS ITSELF.

SOMETHING OF HISTORIC PROPORTIONS IS HAPPENING

By XXX XXXX

Professor of History, Midwest College

I am a student of history. Professionally. I have written 15 books in six languages, and have studied it all my life. I think there is something monumentally large afoot, and I do not believe it is just a banking crisis, or a mortgage crisis, or a credit crisis. Yes these exist, but they are merely single facets on a very large gemstone that is only now coming into sharper focus.

Something of historic proportions is happening. I can sense it because I know how it feels, smells, what it looks like, and how people react to it. Yes, a perfect storm may be brewing, but there is something happening within our country that has been evolving for about ten - fifteen years. The pace has dramatically quickened in the past two.

We demand and then codify into law the requirement that our banks make massive loans to people we know they can never pay back. Why?

We learn that the Federal Reserve, which has little or no real oversight by anyone, has 'loaned' two trillion dollars (that is $2,000,000,000,000) over the past few months, but will not tell us to whom, or why, or disclose the terms. That is our money. Yours and mine. And that is three times the $700B we all argued about so strenuously just this past September. Who has this money? Why do they have it? Why are the terms unavailable to us? Who asked for it? Who authorized it? I thought this was a government of 'we the people', who loaned our powers to our elected leaders. Apparently not.

A very scary read.

Geithner Wants Broad Powers And Independent Regulator

Steve Bartlett must be laughing his butt off. ABCnews.com is reporting that Treasury Secretary Tim Geithner wants to create an independent regulator to oversee the financial institutions.

Refer to my post where I recall Barlett's words before Kanjorski's committee in 2003.

Mr. BARTLETT. Mr. Kanjorski, our organization and our companies have been quite concerned about this from a safety and soundness as well as a mission for the last several years. We have communicated that concern. But recently, that concern seems to have been highlighted by a number of factors.

So, yes, sir, I believe there is an urgency that is to the tune of some $3.3 trillion that is either owned or guaranteed by these two agencies that all the testimony that you have heard today bring in some question as to whether they are being properly regulated. So we think they are not being properly regulated. And we believe that with $3.3 trillion, you do not want to wait too long. And now is the time to act.

Kanjo, why did it take this long?

Profs: Kanjo Subject To Scrutiny Over Financial Mess

Forgive me for not posting yesterday. The media portrayal of Paul Kanjorski has me on a mission. They are out to make him look like a savior with respect to the financial mess when he was actually an accomplice in creating this fiasco.

Andrew Seder of the Times Leader writes a story line yesterday about Paul Kanjorski's vulnerablity to questioning of his role in the financial storm that has wreaked havoc over the entire country.

U.S. Rep. Paul E. Kanjorski recently warned the heads of several large banks that took government bailout funds they’ve put themselves in a situation that opens them up to tough questions and criticism.

“You once lived behind a one-way mirror, unaccountable to the public at large,” said Kanjorski, D-Nanticoke, during the Feb. 11 committee hearing. “When you took taxpayer money you moved into a fishbowl.”

Two local professors said Kanjorski needs to heed his own warning.

Kanjo has been just as much a part of this disaster but it appears he hopes the public has a short memory. Rewind the Kanjorski Youtube videos and printed testimony.

Here is one from March, 2008 where he tries to pin the mess on Bush but actually acknowledges that the problems occured in 2006 while he was chairman of the Subcomittee responsible for oversight.- Comment at 1:24 into video. He grandstands for the media asking why the Federal Reserve and the Treasury ask questions. Paul, why didn't you act, forget the questions? He fails to acknowledge that the Financial Services Modernization Act of 1999 was responsible for the financial mess today. In his typical partisan fashion he tries to lay it at George Bush's doorstep. What a crock.

At 1.:26 he states "We are trying to save the American economy. Had Congress did its job in the first place we wouldn't be in this mess. Asking Paul Kanjorski to fix this mess is like asking the shooter to perform surgery on the patient. How well was the economy saved?

In this video he talks about the bailout legislation. He states to Paulson it "Does primarily what you want it to do but with the protections the public was asking for." Paul, what protections were they asking for, bonus retention perhaps? That' exactly what Christopher Dodd did but I am sure that this bill was rushed through so fast no one really knew about the provision.

In this video he admits knowing about the AIG bonuses over two months ago. Yet in his own press release the following information is provided.

I am therefore extremely disappointed that AIG will move forward with its plans to pay out 2008 bonuses totaling $165 million, on top of the $55 million paid out late last year, for employees at the very business that caused the company to collapse."

Chairman Kanjorski added, "While these bonuses were agreed to in early 2008 before AIG received any taxpayer money, considering the sweeping changes that have occurred since then, further concessions in AIG's contracts must be seriously considered, especially at the Financial Products unit. Although we must effectively and expeditiously wind down the systemic risks caused by AIG Financial Products, we cannot allow individuals who acted irresponsibly to reap undue benefits."

According to the statement he called, he wrote, but what did he actually do to prevent or stop the bonuses? Only after the bonuses were paid did Congress come up with the idea to tax them.

Congress creates messes then tells the American public they are the solution. They hurredly passed the Emergency Economic Stablization Act of 2008 but that didn't stop the economy from taking a nose dive.

Here is a quote from his opening statement on the third Regulatory Oversight Hearing of government sponsored enterprises. "Specifically, if we ultimately decide to alter the safety and soundness regulation of Fannie Mae and Freddie Mac and to move the regulator to the Treasury Department." Paul, the safety and soundness, are you kidding me??? The only thing safe and sound was the money you accepted from Fannie and Freddie. You were like a child getting money from his parents.

Here is the video that shows the real Paul Kanjorski. He is talking about a strong independent regulator being formed to oversee Fannie Mae and Freddie Mac. The transcript of his words can be found here specifically start on page 157.

Mr. KANJORSKI. Thank you, Mr. Chairman.
Listening to that discussion, I tend to agree that this is a very delicate area on how we handle mission and how we deal with what really independent strong role plus regulation will be and to tailor those two situations to these particular entities, not counting the fact that we have some earlier testimony about throwing in the Federal home loan bank system, which creates an entirely different problem we would have to address.

First of all, is anyone on the panel aware of a crisis situation where we have to do this in the next two or three weeks?

Do you really believe that some of the issues that have been raised here in the discussion with this panel, that this can all be accomplished with deliberative speed in a short period of time, like two or three weeks?

Mr. BARTLETT. Mr. Kanjorski, our organization and our companies have been quite concerned about this from a safety and soundness as well as a mission for the last several years. We have communicated that concern. But recently, that concern seems to have been highlighted by a number of factors.

So, yes, sir, I believe there is an urgency that is to the tune of some $3.3 trillion that is either owned or guaranteed by these two agencies that all the testimony that you have heard today bring in some question as to whether they are being properly regulated. So we think they are not being properly regulated. And we believe that with $3.3 trillion, you do not want to wait too long. And now is the time to act.

Mr. KANJORSKI. I would not suggest that everyone has questioned whether or not we can construct a better regulatory authority than what we presently have. I do not know whether we want to put a qualitative standard on what has existed. But my question is, we have so many fundamental questions, particularly missions and what is a strong independent regulator.

It seems to be we are going to have to wrestle a lot of things. Somebody suggested we write the mission. I think it was Mr. Raines. I venture to say I could anticipate taking weeks and weeks and weeks hammering that around and just what that description in statute should be of what the mission is so that it can be more readily applied.

My problem is I think we have a lot of haste here. We are going to run down and, Steve, having served on this committee before, you know what happens in haste. We sometimes do not dot all of our i's and cross all of our t's. And we can leave some awfully large holes in this mission.

Example, we are just starting to get down to people using the same description of what—you use the term independent and strong independent regulator and gave the example of the OCC and the OTS.

The Secretary, last week, said independent, strong, world-class regulator and gave the example of the IRS. I see a world of difference in that. And he may be more correct than we are or vice versa. But it seems we have to work.

If we are not defining our terms in the same way, we are going to put out a news release that Congress has passed a world-class, strong, independent regulator who cannot come up and talk to Congress, who cannot decide policy questions, who has limitations on supervision, has limitations on prosecutions, et cetera, et cetera, and going right down the line.

Or else, if we all put our minds to it and things do crystallize, we can come up with it.

I am just worried about doing in the limited amount of time left in this session. And I, myself, would like to have the legislation float for a while, so a lot of people could give us critiques of some of the problems that they see every day.

I left this session three or four times and met with people who critiqued me on various things happening here. I find that very informative and helpful, because, obviously, I do not think any of us on the committee are real experts in this area.

We are trying to craft language that will reflect expertise beyond the committee, actually.

With that, I appreciate all of the testimony of the panel. I look forward to hearing from you. As one member of Congress, look, if you see something happening, our names, you just have to call the Capitol operator and get a hold of us, give us some insight and some input as to, you know, how that big truck isn't going to fit in that little garage before we construct the garage.

And other than that, let's hope we can do something really contributory here to this system instead of ending up with just a whitewash on the garage door because there has been some circumstances that have brought this along.

With that, thank you very much for your testimony.
Mr. Chairman, I yield back.

What did he accomplish? He danced around pretty well but failed the people in the end. This testimony is from 2003 which proves he and the Democrats had plenty of time to attack this problem.

O'Bailout- Follow The Cash

Obama is going to be doing a media tour this week to get the public behind him after being thrown off track this week. Geithner and the President will be touting the help that will be needed to shore up the banks.

Did Team Obama drop the ball or throw the game?
Sunday, March 22, 2009
By Jack Kelly, Pittsburgh Post-Gazette


American International Group, an insurance company that has received about $180 billion in taxpayer funds, this month paid $165 million in bonuses to executives whose bad judgment is largely responsible for the financial mess we're in.

Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee, wants the government to take back the bonuses. This is a change of heart for Mr. Dodd, because it was he who inserted in the "stimulus" bill an amendment which specifically protected from restrictions on executive compensation "contractually obligated bonuses agreed on or before Feb. 11, 2009." The amendment applied principally to AIG.

This apparent hypocrisy was not helpful to Mr. Dodd, who has been criticized for receiving a cut-rate loan from Angelo Mozillo, CEO of Countrywide Mortgage, one of the worst of the subprime mortgage lenders, and for his purchase of a $160,000 Irish "cottage" with the assistance of an insider trading felon for whom Mr. Dodd had arranged a pardon.

But it gets better.

The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already," wrote former New York Gov. Eliot Spitzer in Slate Tuesday. "AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation."

Perhaps there's a hint of an explanation in this: Employees of Goldman Sachs contributed $955,473 to the Obama campaign. Employees of CitiGroup contributed $653,468; employees of JPMorgan Chase, $646,058; employees of Morgan Stanley, $485,823

If you want to read about Obama's Crocodile Tears over the AIG bonuses click here.

Dick Cheney Says Its Herbert Hoover Time

When the Senate failed to pass the auto bailout plan VP Dick Cheney told the Republican Senators it would be "Herbert Hoover" time. Here's what Wikipedia has to say about Herbert Hoover.

The final attempt of the Hoover Administration to rescue the economy was the passage of the Emergency Relief and Construction Act which included funds for public works programs(Barack's Plan) and the creation of the Reconstruction Finance Corporation (RFC) in 1932. The RFC's initial goal was to provide government-secured loans to financial institutions, railroads and farmers(AKA Bailout). The RFC had minimal impact at the time, but was adopted by Franklin Delano Roosevelt and greatly expanded as part of his New Deal.(now adopted by Obama)

In order to pay for these and other government programs, Hoover agreed to one of the largest tax increases in American history.Obama's at it again. The Revenue Act of 1932 raised income tax on the highest incomes from 25% to 63%. The estate tax was doubled and corporate taxes were raised by almost 15%. Also, a "check tax" was included that placed a 2-cent tax (over 30 cents in today's dollars) on all bank checks. Economists William D. Lastrapes and George Selgin,[29] conclude that the check tax was "an important contributing factor to that period's severe monetary contraction." Hoover also encouraged Congress to investigate the New York Stock Exchange, and this pressure resulted in various reforms.

For this reason, years later libertarians argued that Hoover's economics were statist. Franklin D. Roosevelt blasted the Republican incumbent for spending and taxing too much, increasing national debt, raising tariffs and blocking trade, as well as placing millions on the dole of the government. Didn't Obama say the same thing about George Bush??

Roosevelt attacked Hoover for "reckless and extravagant" spending, of thinking "that we ought to center control of everything in Washington as rapidly as possible," and of leading "the greatest spending administration in peacetime in all of history." Roosevelt's running mate, John Nance Garner, accused the Republican of "leading the country down the path of socialism".[30] Obama you go man! Spend on healthcare. Spend on job creation. Spend, Spend, Spend, or should we call you Billy Idol



As for Roosevelt who easily beat Hoover for re-election- "Roosevelt overreached on his Supreme Court packing plan, and a further financial recession in 1937 and 1938 tarnished his image of invincibility."

Any of this sound like Deja Vu?

Paul Kanjorski Is Wasting Billions

Last evening, December 10, 2008, Lou Dobb's was interviewing Harvard Law School Professor Elizabeth Warren, head of the Congressional Oversight Panel that was created as part of the bailout package.She noted during her interview that the bailout money given to the banks failed to trickle down to the American public.

"We've handed this money out. It's been stuffed into the vaults of the banks. We haven't asked the banks for any terms or to change anything. We haven't said how are you going to tie this to the American families. Let's face it. The bottom line is you can't save banks if the American family goes down the tubes. It's not possible. They can't exist. You don't get to save them and not save this country and the people who run this country, who are the real economy in this country."

During that segment Lou Dobb's aired a video of Paul Kanjorski's comments on the hearing held on the bailouts. Once again Paul Kanjorski doesn't know when to keep his mouth shut. Here are his comments.

"REP. PAUL KANJORSKI (D), FINANCIAL SERVICES CMTE.: We have to tell the American people the truth, and that truth is going to hurt. Some of that truth is we're going to spend billions of dollars incorrectly, wrongly and wastefully. They're going to have to know that because we're like mad scientists in an economic laboratory trying to get the correct potion."

Professor Warren had this reaction to his comments:

"WARREN: There's just -- this breaks my heart. We don't have billions of dollars to spend here. One of the problems with spending money in this way is that at some point we really do run out of money. And if we're not using our money in the right ways, in ways to strengthen the American family, in ways to help out with this crazy mortgage foreclosure situation that we've got going, then our opportunity will be lost. It will be gone."

Paul Kanjorski claims to be the second highest ranking Member of his subcommittee. Just keep spending billions on your experiment, Paul. The people of the 11th district are more than happy to fund it.

Scranton, Wilkes Barre, so you get millions. He is giving away billions. Where is your share??? Kanjorski had the trash talk nerve to call Lou Barletta a creep. Paul, in Hebrew, you would be a hamor. In Spanish you would be a pendejo. No matter what language you speak you would still be the same thing. I hope you can hear me now.

I Say NO to Detroit

Before I delve into this topic I want everyone to know that I was a union member during college for 5 years. I saw firsthand how union can benefit as well as bankrupt a business. If you don't believe me I worked for Spaulding Bakeries. Having sad that I also saw how management that charts the course of a company sticking its head in the sand while enjoying lavish benefits could do more damage than any union's capability.

The bailout program passed by Congress to save the failing financial services sector has become the target of every major business in this country. Insurance companies are buying small banks so they can qualify as a financial institutions thereby qualifying for federal money from the financial rescue program. The insurance industry bought some of the subprime mortgage packages exposing them to losses, of course starting with the greed that came with high interest mortgages.

The Big 3 automakers went to Capital Hill yesterday to make their case for a portion of the bailout money. They called it a loan. The Big 3 CEOs had a PR problem from the moment they touched down in Washington. It seems they took private jets to ask for public money. That action is symbolic of the thought processes in the executive suites of each company.

David Yermack, a professor of finance at New York University's Stern School of Business, wrote a great essay on the need to let the Big 3 die a happy death. He discussed the two main arguments being used to justify some sort of bailout. "Two main arguments are being raised to justify a government rescue of the auto industry. First, large numbers of jobs may be at stake, perhaps as many as three million if one counts all the other firms that supply the Big Three. This greatly overstates the situation. Americans are not going to stop driving cars, and if GM, Ford and Chrysler disappear, other companies will expand to soak up their market share, adding jobs in the process. Many suppliers will also stay in business to satisfy the residual demand for spare parts even if the Detroit manufacturers go under. If the government wants to spend $25 billion to protect auto workers, it would do better to transfer the money to them directly (perhaps by cutting each worker a check for $10,000) rather than by keeping their unproductive employer in business."

Mitt Romney wrote an Op-Ed piece in today's New York Times titled "Let Detroit Go Bankrupt".

"Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check."

When the automakers were faced with auto emission controls in the 1970's two things happened. The Japanese left the table, flew home, and starting working on meeting the standards. The American manufacturers left the table, flew home, and called their Congressmen to try to stop the legislation.

"Industry immediately said the standards could not be met. Lee Iacocca of Ford said that a one year extension was needed to “keep us in business for another year.” A General Motors executive named Ernie Starkman told the EPA that requiring catalytic converters on its 1975 MY vehicles would pose “unreasonable risk of business catastrophe” and could conceivably lead to “complete stoppage of the entire production.”

In response to the Clean Air Act, Lee Iacocca at Ford issued a press statement saying that the provisions “could prevent continued production of automobiles after January 1, 1975. Even if they do not stop production, they could lead to huge increases in the price of cars. They could have a tremendous impact on all of American industry and could do irreparable damage to the American economy. And yet, in return for all of this, they would lead to only small improvements in the quality of air.”

As it later turned out, auto industry cost estimates for the 1970s catalytic converter requirements were two times higher than the actual cost. Industry estimates claimed a price tag of nearly $3,000, but actual costs turned out to be only about $1,300.

In 1975, with the passage of the Environmental Policy and Conservation Act, CAFE
standards further changed the face of the American automobile, and led to reductions in size and weight to improve fuel economy. Fuel economy was increased by 40 to 50
percent by MY 1980. General Motors and Ford quickly filed protests, contending the standards would require new, unproven technologies and would negatively impact consumers. The National Highway Traffic Safety Administration rejected the automakers’ claims and concluded that the standards could be met without a significant change in the mix of cars being sold."

The point of this piece centers on auto executives and the union both working against a solution to survive. Instead its time to go back to the government and get a bailout. I, for one, say no. In the shortterm there will be pain but in the long run the industry will be a stronger, more focused machine.

Kanjorski Chose Partisanship Over Constituents

Representative Peter DeFazio(D-Oregon) has some tough words for Paul Kanjorski, Nancy Pelosi, and other fellow Democrats over the Failout program. One of the untold stories in this crisis is the value of assets. Non-performing loans due to an accounting rule are valued at ZERO in the banking industry. In all reality these loans have fair market value but that has been stripped according to this rule. In the video you will hear Rep. DeFazio talk about this problem. Rather than give Secretary Paulson carte blanche to buy whatever assets he deems necessary in this Failout program the low cost/no cost approach would have bypassed that rule to allow the banks to fairly value these loans which would provide them with the liquidity they need to secure more money to lend. But then again what would a person from Northeast PA know about money and banking. Put it this way. I still have my home and my money which is more than I can say for all of the failed financial institutions like Bear Sterns, AIG, Wachovia, etc.

If Congress had listened to Rep. DeFazio we would be in $700 billion. Paul Kanjorski's vote was one of partisanship, not one that considered what type of tax money it takes to pay back $700 billion. Each and every man, woman, and child in this country owes $2,333.00 on th principal not counting the interest that will be paid over the years. Paul Kanjorski signed all of us up for a loan without doing a credit check. Isn't that typical of a man who says its FREE MONEY?

BTW Paul, did NEPIRC inspect Cornerstone Technologies? Exactly what equipment do you think they found there on inspection? Don't worry I am saving that matter for another post. In the meantime think about it. It may come back to you. It came back to them.

Kanjorski Voted For $700 Billion Dollars Then He Said The Bailout Won't Work

According to an article in the Pocono Record Dated October 9, 2008 Paul Kanjorsk states the "Failout" he proposed and voted yes will not work. He voted to spend $700 Billion dollars of taxpayers' money and then has the gall to tell us it won't work. He also tell us Congressional hearings are a joke. These are Paul Kanjorski's own words.

[Kanjorski was asked how and when we will know if the bailout (massive infusions of cash to prop up ailing financial institutions and ensure that businesses and individuals are able to borrow money) is a success.

"I think we already know," Kanjorski said during a meeting with the Pocono Record editorial board. "It's not going to work. It's so contagious into Europe and Asia now."

"Basically congressional hearings are theater and stage," he said. "We use it to gather information we already know. But it's not a problem-solving process."]

Ed Mitchell and Paul Kanjorski attempts to attack and smear Lou Barletta's position over the "Failout" program really demonstrate the desperate moves they are making this late in the campaign to rescue Kanjorski's reputation. Ed Mitchell offered claims that Lou flip-flopped on supporting the Failout. Let's examine the facts.

This quote is from the Pocono Record dated December 14, 2007

"The Bush Administration’s plan calling for the mortgage industry itself to stem the tide of rising home foreclosures has won praise from Congressman Paul Kanjorski, D-11, who opposes a government bailout." Then Paul Kanjorski comes up and votes for a government bailout plan. BTW Isn't this the same person who is accusing Lou Barletta of supporting George Bush and his policies?

Here is the link on Lou Barletta's position as far as the bailout goes: You can see that he supported government efforts to "continue to work until an effective, sustainable plan is passed." Also "5. An independent commission should be established to review the actions that brought our nation to this point. Who had oversight over these industries? What legislation – or lack of legislation –precipitated these events?" The independent commission as well as item 6 were not part of the legislation. He is not against the bailout per se, but the specific lack of a meaningful plan. Even Paul Kanjorski is quoted saying "It's not going to work. I back this paragraph up with this link to Barletta's press release after the plan was announced. “The current plans on the table in Washington do not accomplish the goals I set out in my statement on Wednesday."

Should we not expect meaningful hearings rather than theatre and stage?

To me all of these facts point to Paul Kanjorski and Ed Mitchell being disingenuous with the voters, once again stretching the facts to win an election.

Paul Kanjorski Gave Them $85 Billion -AIG Execs Party On Our Money

According to an article by Brian Ross of ABC News, the ink wasn't dry on the "Failout" plan approved by Paul Kanjorski, Nancy Pelosi, Barney Frank, Maxine Waters, and Gregory Meeks known as the Beating 5 (due to the beating the American public is taking over providing this failout)before the generous executives over at AIG spent $440,000.00 on a retreat that included pedicures and manicures. "(E)xecutives of the giant AIG insurance company headed for a week-long retreat at a luxury resort and spa, the St. Regis Resort in Monarch Beach, California, Congressional investigators revealed today." Room rates generally hover around $1,000.00 per night.

Some thoughts come to mind-gluttony, ravenousness, voracity, avarice, greediness, unaldutlerated audacity, and self-indulgence. Joe Six Pack's thoughts on the matter were vengeance, retribution, reckoning, and justice. Foghorn Leghorn would say that these boys are more mixed up than feathers in a whirlwind. These executives have clouded their senses of acquisition and enslavement to ever more material pleasures, the attendant power, and a need to store up surplus gratification at the expense of hard working Americans. Our reaction to the news starting to filter out of Washington should be a tsuanami of epic proportions.

Washington needs to have an epiphany that the American public has limits of toleration. Richard Fuld, former CEO of Lehman Brothers, getting his lights knocked out symbolizes that limit. Both Fuld and the execs at AIG are shameless in their actions.

If you really want to see why the Failout was so important visit rightcoast for an excellent post for contribution figures obtained from OpenSecrets.

Paul Kanjorski Aids Foreclosure on 90 Year Old Woman

Country Wide and Fannie Mae have contributed millions to Paul Kanjorski. He wants to get re-elected. All this woman wanted was her home. Paul Kanjorski voted to bailout Fannie Mae today. Who in Washington is going to bailout Addie Polk?! It's a 101 year old home for Gosh Sake with a 90 year old woman in it.

A moratorium on all Fannie Mae foreclosures should be instituted immediately. The American taxpayer was forced through taxation without representation to guarantee their loans with this bailout. The governement should use the golden parachute money to help the Addie Polks in this country. If you cut the Fannie Mae CEO pay to $1 million per year 248 Addie Polks' homes would be saved.

Paul, stop taking the special interests money and unfortunate situations like this will not occur. Of course he is beholding to Fannie Mae so what are the chances the CEO is going to have to suffer like Addie Polk?

The following story is found at the link on CNN.

10/03/2008(CNN)-A 90-year-old Akron, Ohio, woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home became a symbol of the nation's home mortgage crisis Friday.

Addie Polk is being treated at Akron General Medical Center after shooting herself at least twice in the upper body Wednesday afternoon, her city councilman said.

U.S. Rep. Dennis Kucinich, D-Ohio, mentioned Polk on the House floor Friday during debate over the latest economic rescue proposal.

"This bill does nothing for the Addie Polks of the world," Kucinich said after telling her story. "This bill fails to address the fact that millions of homeowners are facing foreclosure, are facing the loss of their home. This bill will take care of Wall Street, and the market may go up for a few days, but democracy is going downhill."

Neighbor Robert Dillon, 62, used a ladder to enter a second-story bathroom window of Polk's home after he and the deputies heard loud noises inside, Dillon said.

"I was calling her name as I went in, and she wasn't responding," he said.

He found her lying on a bed, and he could see she was breathing. He also noticed a long-barreled handgun on the bed, but thought she just had it there for protection. He touched her on the shoulder.

"Then she kind of moved toward me a little and I saw that blood, and I said, 'Oh, no. Miss Polk musta done shot herself,' " Dillon said.

He hurried downstairs and let the deputies in. He said they told him they found Polk's car keys, pocketbook and life insurance policy laid out neatly where they could be found, suggesting she intended to kill herself.
"There's a lot of people like Miss Polk right now. That's the sad thing about it," said Akron City Council President Marco Sommerville, who had met Polk before and rushed to the scene when contacted by police. "They might not be as old as her, some could be as old as her. This is just a major problem."

In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit.

Over the next couple of years Polk missed payments on the 101-year-old home, which she and her late husband purchased in 1970. In 2007, Fannie Mae assumed the mortgage and later filed for foreclosure.

Deputies had tried to serve Polk's eviction notice more than 30 times before Wednesday's incident, Sommerville said. She never came to the door, but the notes the deputies left would always disappear, so they knew she was inside and ambulatory, he said.

The city is creating programs to help people keep their homes, Sommerville said.

"But what do you do when there's just so many people out there and the economy is in the shape that it's in?"

Many businesses and individuals have called since Wednesday offering to help Polk, Sommerville said.

"We're going to do an evaluation to see what's best for her," he said. "If she's strong enough and can go home, I think we should work with her to where she goes back home. If not, we need to find another place for her to live where she won't have to worry about this ever again."

For his part, Dillon hopes his neighbor of 38 years can return to her home.

"She loves that house," he said. "I hope they can get her back in. That would make me feel better because I don't know what they're going to put in there once she leaves."

He said the neighborhood is declining because so many people have lost their homes.

"There's a lot of vacant houses around here. ... Now I'm going to have a house on my left and a house on my right, vacant," he said. "That don't make me feel good, because we were good neighbors, we trusted each other, and we looked out for each other.

"This neighborhood is shot, to me, from what it used to be," he added.

"When I moved here, if it were like it is now, I would have never moved here. But it was a nice neighborhood....

"I'll just tough it out. I'm too old to start thinking about buying another house."

Sommerville said that by the time people call for help with an impending foreclosure, it's usually too late.

"I'm glad it's not too late for Miss Polk, because she could have taken her life," Sommerville said. "Miss Polk will probably end up on her feet. But I'm not sure if anybody else will."