Archive for the 'March' Category

Tax revolt

March 30, 2009

 

This deserves to be spread around:

 

http://www.lewrockwell.com/orig9/cooper7.html

Therefore, I have gone to my HR department at work and doubled my allowances on my W-4 from 5 to 10. I’m going to do whatever I need to do to make sure that during the year I pay as close to $0 in income tax as possible. Then in April rather than filing a tax return I’m going to file my personal declaration of independence from the federal government. Not a declaration of independence from the United States but rather from the despotic government that enslaves her.

I realize the consequences this will mean for me and my family (I have two children 10 and 4), but I’m tired. It will be the most meaningful thing, the most important thing, the most patriotic thing that maybe I’ve ever done. I’m finished being an enabler. I’m doing it for my family and all the other families that suffer. I’m doing it for the courageous people that have come before me.

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Army Investigating How and Why Troops Were Sent Into Alabama Town

March 19, 2009

Those who have followed my past posts on Posse Comitatus and the increasing concern regarding the federal military conducting training for domestic operations should read Army Investigating How and Why Troops Were Sent Into Alabama Town After Murder Spree

 

“On March 10, after a report of an apparent mass murder in Samson, Ala., 22 military police soldiers from Fort Rucker, Ala., along with the provost marshal, were sent to the city of Samson,” Harvey Perritt, spokesman for the U.S. Army Training and Doctrine Command (TRADOC) at Fort Monroe, Va., told CNSNews.com on Monday.

 

The article questions under whose authority the federal troops were called.  An investigation is currently under way, but the troops were not called up by Alabama Governor Bob Riley. 

 

Wrongful use of federal troops inside U.S. borders is a violation of several federal laws, including one known as the Posse Comitatus Act of 1878, Title 18, Section 1385 of the U.S. Code.

 

The article continues to outline the Insurrection Act amendment of 2007 as follows (emphasis mine):

 

In addition, there is the Insurrection Act of 1808, as amended in 2007, (Title 10, Section 331 of the U.S. Code) under which the president can authorize troops “to restore order and enforce the laws of the United States” in an insurrection.

 

Unfortunately, the Insurrection Act is unclear as whether the President, upon request of a Governor, may call in the National Guard forces of another state, or whether he may deploy federal troops:

 

“Whenever there is an insurrection in any State against its government, the President may, upon the request of its legislature or of its governor if the legislature cannot be convened, call into federal service such of the militia of the other States, in the number requested by that State, and use such of the armed forces, as he considers necessary to suppress the insurrection,” the law states.
 

2007 Amendment:


In 2007, Congress expanded the list to include “natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition” as situations for which the president can authorize troops, provided that  “domestic violence has occurred to such an extent that the constituted authorities of the state or possession are incapable of maintaining public order.” 

 

The article goes on to state:

 

Congress has been clear that the use of U.S. troops for civilian police purposes is forbidden.

 

However, this is most certainly NOT the case, as documented by many sources, including the Army Times, as I have covered here.  Both the legislative and executive branches of the federal government have, in fact, been anything but “clear” on this issue.

 

This is yet another interesting development in overreach by the federal government.  As always, I will continue to follow these stories closely.  It is evident that we are reaching critical mass on these issues.  As billions of taxpayer dollars are spent and trillions more printed, as the federal government continues to expand its reach into more areas of American’s lives, as the Bill of Rights is trampled, as our Constitution is ignored and as more states pass motions clarifying their rights under the Constitution and clarifying their right to ignore unconstitutional measures by the federal government, 2009 promises to be a busy year.

 

Pot, meet kettle: Congress feigns outrage at AIG Bonuses

March 18, 2009

Many speeches and much feigned outrage has emanated from our congress over the awarding of bonuses to AIG employees.

 

While I have consistently spoken out against bailouts of any kind, perhaps the issue of how the money is to be spent should have been more clearly addressed by our ‘representatives’ prior to signing off on a blank check for billions of taxpayer dollars.

 

Therefore, I suggest that the employees of AIG who received bonuses should return the money. They should do it as soon as the following individuals return the money they received from AIG in 2008:

American International Group: All Recipients

Among Federal Candidates, 2008 Cycle

Total: $632,618

Name

Office

Total Contributions

Dodd, Chris (D-CT)

Senate

$103,100

Obama, Barack (D-IL)

Senate

$101,332

McCain, John (R-AZ)

Senate

$59,499

Clinton, Hillary (D-NY)

Senate

$35,965

Baucus, Max (D-MT)

Senate

$24,750

Romney, Mitt (R)

Pres

$20,850

Biden, Joseph R Jr (D-DE)

Senate

$19,975

Larson, John B (D-CT)

House

$19,750

Sununu, John E (R-NH)

Senate

$18,500

Giuliani, Rudolph W (R)

Pres

$13,200

Kanjorski, Paul E (D-PA)

House

$12,000

Durbin, Dick (D-IL)

Senate

$11,000

Perlmutter, Edwin G (D-CO)

House

$10,500

Rangel, Charles B (D-NY)

House

$9,000

Edwards, John (D)

Pres

$7,850

Corker, Bob (R-TN)

Senate

$7,400

Smith, Chris (R-NJ)

House

$6,900

Neal, Richard E (D-MA)

House

$6,500

Rockefeller, Jay (D-WV)

Senate

$6,500

Reed, Jack (D-RI)

Senate

$6,000

Udall, Mark (D-CO)

House

$5,800

Maffei, Dan (D-NY)

House

$5,000

Nelson, Bill (D-FL)

Senate

$5,000

Warner, Mark (D-VA)

Senate

$5,000

Bean, Melissa (D-IL)

House

$4,750

Shelby, Richard C (R-AL)

Senate

$4,500

Mahoney, Tim (D-FL)

House

$4,000

Crowley, Joseph (D-NY)

House

$3,500

Fimian, Keith S (R-VA)

House

$3,300

Huckabee, Mike (R)

Pres

$3,300

Leavitt, David O (R-UT)

House

$3,000

Murphy, Chris (D-CT)

House

$2,800

Berman, Howard L (D-CA)

House

$2,500

Dole, Elizabeth (R-NC)

Senate

$2,500

Garrett, Scott (R-NJ)

House

$2,500

Cornyn, John (R-TX)

Senate

$2,300

Culberson, John (R-TX)

House

$2,300

Goode, Gregory Justin (R-IN)

House

$2,300

Landrieu, Mary L (D-LA)

Senate

$2,300

Lummis, Cynthia Marie (R-WY)

House

$2,300

Shays, Christopher (R-CT)

House

$2,200

Davis, Tom (R-VA)

House

$2,000

Hoyer, Steny H (D-MD)

House

$2,000

Inouye, Daniel K (D-HI)

Senate

$2,000

Pomeroy, Earl (D-ND)

House

$2,000

Visclosky, Pete (D-IN)

House

$2,000

Weiner, Anthony D (D-NY)

House

$2,000

King, Pete (R-NY)

House

$1,843

Shaheen, Jeanne (D-NH)

Senate

$1,500

Grassley, Chuck (R-IA)

Senate

$1,250

Nelson, Ben (D-NE)

Senate

$1,200

Wicker, Roger (R-MS)

Senate

$1,100

Baker, Richard (R-LA)

House

$1,000

Barrasso, John A (R-WY)

Senate

$1,000

Bennett, Robert F (R-UT)

Senate

$1,000

Brady, Kevin (R-TX)

House

$1,000

Capps, Lois (D-CA)

House

$1,000

Coleman, Norm (R-MN)

Senate

$1,000

Cooper, Jim (D-TN)

House

$1,000

Donnelly, Joe (D-IN)

House

$1,000

Ellsworth, Brad (D-IN)

House

$1,000

Engel, Eliot L (D-NY)

House

$1,000

Enzi, Mike (R-WY)

Senate

$1,000

Gillibrand, Kirsten E (D-NY)

House

$1,000

Gordon, Bart (D-TN)

House

$1,000

Harkin, Tom (D-IA)

Senate

$1,000

Himes, Jim (D-CT)

House

$1,000

Jones, Stephanie Tubbs (D-OH)

House

$1,000

Kind, Ron (D-WI)

House

$1,000

Kirk, Mark (R-IL)

House

$1,000

Lautenberg, Frank R (D-NJ)

Senate

$1,000

Lowey, Nita M (D-NY)

House

$1,000

Maloney, Carolyn B (D-NY)

House

$1,000

McMahon, Michael E (D-NY)

House

$1,000

Olson, Pete (R-TX)

House

$1,000

Pryor, Mark (D-AR)

Senate

$1,000

Salazar, Ken (D-CO)

Senate

$1,000

Tiberi, Patrick J (R-OH)

House

$1,000

Towns, Edolphus (D-NY)

House

$1,000

Wilson, Charlie (D-OH)

House

$1,000

Mielke, Daniel Ernest (R-WI)

House

$900

Huelskamp, Timothy A (R-KS)

House

$750

Laesch, John (D-IL)

House

$750

Tinklenberg, Elwyn (D-MN)

House

$750

Vilsack, Thomas J (D)

Pres

$700

Harrison, Stephen A (D-NY)

House

$604

Brownback, Sam (R-KS)

Senate

$500

Courtney, Joe (D-CT)

House

$500

Crapo, Mike (R-ID)

Senate

$500

Davis, Geoff (R-KY)

House

$500

Fossella, Vito (R-NY)

House

$500

Gilchrest, Wayne T (R-MD)

House

$500

Musgrove, Ronnie (D-MS)

Senate

$500

Myers, Chris (R-NJ)

House

$500

Pierluisi, Pedro (3-PR)

 

$500

Putnam, Adam H (R-FL)

House

$500

Richardson, Bill (D)

Pres

$500

Roggio, Robert (D-PA)

House

$500

Van Hollen, Chris (D-MD)

House

$500

Wu, David (D-OR)

House

$500

 

METHODOLOGY: The numbers on this page are based on contributions from PACs and individuals giving $200 or more. All donations were made during the 2008 election cycle and were released by the Federal Election Commission. Figures for the current election cycle are based on data released on February 09, 2009.

 

 

The more things ‘change’, the more they stay the same

March 18, 2009


8/20/08         MCCAIN: “I still believe the fundamentals of our economy are strong. We’ve got terribly big challenges now, whether it be housing or employment or so many of the other — health care. It’s very, very tough times. It’s very tough. But we’re still the most innovative, the most productive, the greatest exporter, the greatest importer.”

 

11/03/08       OBAMA: “It’s not that I think John McCain doesn’t care what’s going on in the lives of most Americans. I just think [he] doesn’t know…..Why else would he say, today, of all days — just a few hours ago — that the fundamentals of the economy are still strong? Senator — what economy are you talking about?”

 

3/14/09         In a dramatic, and some might say cynical, change in message, President Barack Obama said yesterday that the fundamentals of the nation’s economy are, “sound.” The comments come just weeks after the president was consistently warning that the economy faced a “catastrophe” if Congress did not act to pass his $787 billion economic stimulus bill quickly

 

Funny how the more things ‘change’, the more they stay the same.

Change you can believe in

March 17, 2009

 

This was sent in from regular reader and contributor ‘Logan’, also an astute observer of political events:

 

2/11/09         SPRINGFIELD, Va. – President Barack Obama said Wednesday that heavy-equipment maker Caterpillar has informed him it will rehire some of the thousands of workers it has laid off in recent weeks if Congress passes an economic stimulus bill.

 

2/12/09         EAST PEORIA, IL. – President Obama today repeated the claim we asked about yesterday at the press briefing that Jim Owens, the CEO of Caterpillar, Inc., “said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off.”

 

Asked if the stimulus package would be able to stop the 22,000 layoffs or not, Owens said, “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again”

 

2/17/09         WASHINGTON, D.C. – President Barack Obama has signed into law the most sweeping economic package in decades, a rescue plan designed to create millions of jobs and boost consumer spending.

 

3/17/09         PITTSBURGH (AP) – Caterpillar Inc. on Tuesday announced plans to lay off more than 2,400 employees at five plants in Illinois, Indiana and Georgia as the heavy equipment maker continues to cut costs amid the global economic downturn.

 

Now that’s change you can believe in.

 

BWS:

 

As I’ve written many times before, government cannot ‘create’ any jobs.  Government jobs (or private sector jobs sponsored by the government) simply drain resources from the real economy in the form of taxation or borrowing – both of which are paid by the private sector, the former in overt confiscation and the latter in the form of inflation, the stealth tax on every private dollar earned or owned.  The net result is worse than simply the absence of any true, viable economic gain.  Far worse, the result is the inefficient allocation of capital (capital allocation by government fiat rather than market determination of capital value), and unintended consequences to the real economy that are only felt far down the line.

 

But this is only phase one.  As covert nationalization fails, government will overtly nationalize infrastructure projects and financial sector firms, among others.  Then we will once again re-learn the Law of the Commons (also known, aptly, as the Tragedy of the Commons): that, in the absence of incentive to maintain or increase the value of a given resource, the functional (and capital) value of the resource deteriorates rapidly over time. 

 

As if this law needed an additional proof after the human tragedy of the 20th century statist experiments, we are in the process of creating one in the 21st century United States. 

 

The so-called Constitution Party

March 16, 2009

I have received several emails promoting the Constitution Party, asking for my support.  Unfortunately for some, my views are the Constitution Party are not positive.

 

The Constitution Party can be found at www.constitionparty.com.  Specifically, the party platform can be viewed here: http://www.constitutionparty.com/party_platform.php#Sancity%20of%20Life .

 

Despite some outstanding work in applying Constitutional principles as fixes to the problems of the modern United States, the Constitution Party is essentially a religious party – more specifically a Christian party.  On this basis, we can find no common ground.  

 

Notice that the first principle of the party, immediately after the ‘preamble’, is the “Sanctity of Life”.  Here’s what this means to the Constitution Party:

The pre-born child, whose life begins at fertilization, is a human being created in God’s image. The first duty of the law is to prevent the shedding of innocent blood. It is, therefore, the duty of all civil governments to secure and to safeguard the lives of the pre-born.

 

To that end, the Constitution of these United States was ordained and established for “ourselves and our posterity.” Under no circumstances may the federal government fund or otherwise support any state or local government or any organization or entity, foreign or domestic, which advocates, encourages or participates in the practice of abortion. We also oppose the distribution and use of all abortifacients.

 

We affirm the God-given legal personhood of all unborn human beings, without exception. As to matters of rape and incest, it is unconscionable to take the life of an innocent child for the crimes of his father.

 

Even in matters of rape and incest, according to the Party, is in “unconscionable” to abort a pregnancy at any stage.  The problem here is not one’s view on abortion, or whether one is ‘pro-life’ or ‘pro-choice’.  My opinion on the issue (or yours, for that matter) is irrelevant.  The problem is the inconsistency of maintaining this position while arguing for a Constitutional Republic along the lines of our Founding Fathers’ anti-statist views.  How does one maintain a ban on abortion?  One utilizes the force of the state against the citizen.  What if a pregnant woman desires an abortion?  Does the ‘Constitution’ Party prevent her from obtaining one?  Apparently.  How do they prevent her?  Will they send police to her home?  Arrest her at gunpoint?  Will they imprison her against her will and force her to give birth?  Draw a prohibition to its logical conclusion and you have just another variation of the police-statism we have today. 

 

Perhaps such a ban will be enforced by prohibiting doctors from performing abortions.  How will this be enforced?  Will the same ‘jack-booted thugs’ currently wearing “DEA” or “ATF” on their uniforms be sent with automatic weapons to arrest the doctor?  Will the doctor be imprisoned?  If so, for how long?  Who decides?  Where does it all end?

 

The issue of abortion requires great intellectual maturity and honesty to discuss in the context of Constitutional self-government simply because so many have strong opinions on the issue.  But the real issue is handing over power to the state to compel action (or inaction) through its near-monopoly on force.  Apparently the Constitutional Party is more than willing, in this case, to cede the state such power over the individual.  Again, where does it end?  If it is the position of the party that such a handover of power will end with abortion, they are no better than any other group of statist ‘banners’ looking to outlaw what they find objectionable, despite the power dynamics involved.

 

Now, lest you think I am simply focusing on the very controversial issue of abortion, let us delve deeper into the party platform.  In one sentence at the end of the “Sanctity of Life” platform point, we find:

 

Finally, we also oppose all government “legalization” of euthanasia, infanticide and suicide.

 

So now the government will also utilize force to prevent, for example, a slowly, painfully dying man’s desire to be put to sleep rather than put his family through extended heartache.  Now the government will utilize force to keep alive one who is functionally brain-dead and can be kept alive only at great cost.  The individual’s living will will have no merit, presumably, in such a situation, nor will the wishes of his family.

 

Another example of the religious nature of the so-called Constitutional Party can be found in the platform point labeled “Pornography”:

 

Pornography, at best, is a distortion of the true nature of sex created by God for the procreative union between one man and one woman in the holy bonds of matrimony, and at worst, is a destructive element of society resulting in significant and real emotional, physical, spiritual and financial costs to individuals, families and communities. We call on our local, state and federal governments to uphold our cherished First Amendment right to free speech by vigorously enforcing our laws against obscenity to maintain a degree of separation between that which is truly speech and that which only seeks to distort and destroy.

 

Now we find the so-called Constitutional Party is also interested in censoring speech and outlawing pornography.  Who is to determine the difference between art and pornography?  Where is the line drawn?  Are the party faithful capable of determining this in all cases?  I certainly am not, nor do I care if my neighbor wishes to view pornography. 

 

And notice the Orwellian use of language: “We call on our…governments to uphold our cherished First Amendment right to free speech by vigorously enforcing our laws against obscentity…”.  This is not the Constitutionalism I hold so dear, nor would I entrust others to determine what speech is “free” and which is “obscene”. 

 

Again, despite some admirable and true Constitutional positions the party outlines, it is fundamentally a religious party.  The party “preamble” says it all (emphasis mine):

 

The Constitution Party gratefully acknowledges the blessing of our Lord and Savior Jesus Christ as Creator, Preserver and Ruler of the Universe and of these United States. We hereby appeal to Him for mercy, aid, comfort, guidance and the protection of His Providence as we work to restore and preserve these United States.

 

This great nation was founded, not by religionists, but by Christians; not on religions but on the Gospel of Jesus Christ. For this very reason peoples of other faiths have been and are afforded asylum, prosperity, and freedom of worship here.

 

The goal of the Constitution Party is to restore American jurisprudence to its Biblical foundations and to limit the federal government to its Constitutional boundaries.

 

I, and many others like me, refuse to cast my lot with a party fundamentally, and by its own admission, based on “restoring” America to its “Biblical foundations”.  The true foundations of the United States of America are in intellect, not faith; in independence, not religious community; and in highly decentralized self-government, not theocracy. 

 

I must therefore conclude that the “goal” of the Constitution Party, as stated in its own words, is incompatible with Jeffersonian minarchy, the intent of our Founding Fathers, their fierce independence and their revolutionary spirit.  Our Founding Fathers were, fundamentally, men of the Age of Reason.  Many were deists and Masons.  Few were religious fundamentalists.  And while the culture of 18th century America was largely Christian, and a strict Christianity was observed by the a large number of citizens, to define the revolution, or 18th century America, solely in the context of religion is intellectually dishonest and suggests a profound misunderstanding of what motivated our Founding Fathers. 

 

The religious and social culture of 18th century America is not something we can arbitrarily recreate, nor is such a recreation desirable.  It has been observed that no man is free from the prejudices of his time.  To confuse fundamentalist Christianity as inexorably linked to the intellectual foundations of our revolution and our Founding Fathers makes as much sense as linking such foundations to the institution of slavery.  One must detach our Founders’ intellectual concepts from the culture of their historic period to truly understand their meaning.  Again, we cannot recreate the culture of an historic period. Rather, we should seek to understand the intellectual foundations and political and economic motivations behind the American Revolution.  Only then can we truly understand the fierce independence, anti-statism, and desire for self-government that is our heritage.  These are the ideas that made America unique in the world, not Christianity.  In the late 18th century, it must be noted, the English worshipped the same god, as did the French, Spanish and a host of our other allies and adversaries.  Christianity is not what made revolutionary America unique. 

 

Our political problems today do not stem from a lack of Christianity.  Rather, they stem from the out-of-control growth of the state and the abandonment of Constitutional principles of local self-government.  Our problems involve too much trust in the state and a statist mentality among our citizens, so quick as they are to cede power to the state in a false-bargain for ‘safety’, to place their own liberty at risk in order to ban or control that which they find personally objectionable.  Our problems stem from a lack of understanding our own history, our own revolution and our own Constitution – none of which are taught in schools.

 

As such, I can find no common cause with an overtly Christian political party.  And that’s really a shame, because –as I stated above- the party has done excellent work in getting the word out, in applying many sound Constitutional principles to the problems of our modern, out-of-control government.  The party produces excellent information packets and their website is very good.  Their position on the Second Amendment is both Constitutional and absolute.  The majority of their positions are strictly Constitutional in nature.  Why the party feels incapable of detaching their sound Constitutional principles from their religious fervor is beyond my understanding. 

 

For these reasons, like so many other American Patriots, I find myself still without a party.  And so I suggest Patriots beware, and use great caution before throwing in your lot with religious parties, lest you find the power of the state used to enforce yet another form of collective dominance of the individual.  While you may support positions against abortion or pornography and feel these planks are ‘common sense’, if we have learned anything it should be that enabling government is a one-way street to statism.  We should understand, by now, that allowing government to outlaw and enforce only starts the snowball rolling, that police agencies will grow and along with them regulations, until the two become a mutually sustaining dynamic, all at the expense of individual liberties. We have seen this with the ‘war on drugs’ and the ‘war on terror’.  We saw this with prohibition of alcohol, and we see it today with prohibitions on human actions both large and small.  We see the growth of taxation and regulation, policing and surveillance.  We see the growth in power of the state at the expense of the individual in all aspects of modern society.  Taking power from bureaucrats simply to hand it over to theocrats seems a senseless exercise. 

 

Most of all I fear that as a society, we have become hopelessly in favor of subjecting our opinions upon our neighbors.  This can only empower and serve the interests of the state.  It is within this context that the state is winning and will continue to grow until we are ready to set aside our pet issues and petty disagreements and unite around true independence.  A religious version of self-government that outlaws pornography and abortion at the point of the state’s sword, and raises one version of the divine over the universally human is inconsistent with true Constitutionalism.  Theocracy is just another form of collective statism. 

 

The Second American Revolution?

March 9, 2009

 

I feel compelled to share this link, The Second American Revolution.

 

I view the dismantling of our Constitution, and hence our Republic, as a process rather than an event.  This process has been going on for decades, under the ‘leadership’ of both mainline political parties.  While I do not feel this is a new ‘event’ corresponding with the election of Obama, clearly we are now at a crucial point where this dismantling of both our Constitution and our Republic stands to be taken to a new level. In this great dismantling, I view Obama as a symptom rather than a cause.  I suggest readers take some time with this article, read the numerous supporting links, and judge for themselves.

 

Of specific interest is the second half of the article dealing with Obama’s ‘Civil Defense’ force – yet another layer of police in our Republic that has already been evolving down the road to police state.

Listen to Rahm Emanuel (Obama’s Chief of Staff explain how college students are about to be forced to join (mandatory) a military organization, with boots and nice crisp uniforms. The Red Shirts are coming, the Red Shirts are truly coming and it is 2009! This joker even wrote a book about it.

  1. He will sneak legislation through Congress (since none of the Congressmen even read the bills that they sign, throwing billions of our dollars around the world in the process. )
  2.  He will also attempt the fear route (he has started this process already!).  What he needs to do is have terrorist attacks take place in America so that he can ’save us’ and create his monstrous civil police force.

More on the proposal for a civil defense force here.

 

Another issue this article speaks to is that of Obama’s birth certificate, an issue I assume most readers are already familiar with.

FACT : The State of Hawaii issues REAL birth certificates to people born in other nations like Russia, Japan, China and Kenya. 

FACT: Only the  vault copy of an American citizen’s birth certificate will tell what nation you were born in if you have a real Hawaiian birth certificate. Thousands of people born in South Africa, Australia and Indonesia have real authentic birth certificates that Snopes and Factcheck would say were real, all in the state of Hawaii. Isn’t Hawaii interesting?

FACT: The President of the United States has now spent hundreds of thousands of dollars to prevent you from seeing his vault copy.  Hmmm.

It seems very obvious to me, as it does to many other observers, that Obama is not a native-born United States citizen.  What purpose would hiding a real birth certificate have?  Of what benefit would this be?  Why draw attention having dozens of lawsuits on this issue thrown out of court when he could just produce the document.  It would be so simple to simply produce the birth certificate and silence critics, to rub it in the faces of the ‘right wing wackos’ and be done with the issue forever.  But Obama has not done this.  Why?

I predict that a birth certificate will eventually be produced – once Obama and his team have had a chance to create a passable forgery, payoff all parties involved and ensure the original, Kenyan records are destroyed. 

Hospitals in Hawaii have no record ( especially the two claimed as places of Obama’s birth) of he or Mother in hospital for childbirth – ever! Just another Hmmm.

The whole world is proud of Obama and yet no hospital is coming forth and no Doctor either who delivered him. Surely a shrine would have been proposed by now, in front of the hospital that delivered ‘ The One’.  It is as if he was never born in Hawaii.  Hmm yet again.  Does this surprise anyone? Guess who claims Obama? Mombasa Hospital in Kenya.  How is it that there is a hospital in Kenya with sealed records of Obama and his mother? Sealed due to Obama’s pressure on the Kenyan government in October in Kenya. Hey, I thought he was born in Hawaii as claimed? Now you know why he refuses to let us see his vault copy of his birth certificate.  

The lies of his family in America told of two hospitals where he was supposedly born.

Only Barack Obama’s family in Kenya, which is about to have a a National Holiday for Obama since everyone in Kenya knows he was born in Kenya, claims they were at his birth, and in Kenya.

Central to any demolition of the Republic will be the final erosion of the Second Amendment and civilian disarmament.  Clearly we are headed in this direction, and have been for some time.

One Imperative for you to Save America

What you can do if you are at least 18

Even if you have never fired a weapon, do yourself a favor and exercise your constitutional right to bear arms. Buy a rifle, take some lessons and start up a hunting club. Even if you don’t hunt.  Start a marksmanship club in your college or even high school.  Whatever you do, DO NOT EVER give up your right to bear arms! Not to any government. EVER.

All the stories you hear from history – around the world – about ethnic cleansing, oppression of minorities, totalitarian regimes – none of these could have happened if the people were armed. [note: I speak directly to this issue in Gun Control: 56 Million Deaths 

The Second Amendment is the “enforcement clause” of the rest of the Bill of Rights. The right to keep and bear arms is, like free speech and religious freedom, a central part of our political heritage as a free people. We MUST preserve it.

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.

Thomas Jefferson

Will the history of our great nation, the history of our revolution, the words and writings of our Founding Fathers be taught to those college students conscripted into Obama’s civil police force?  Somehow, I doubt it.

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Taxpayer Cram-Down

March 6, 2009

 

The issue of mortgage ‘cram-downs’ – allowing bankruptcy judges to reduce principle on primary residential mortgage loans – is in the news again as a version of legislation passed in the house of ‘representatives’ yesterday.  This is an extremely important issue and the passage of such legislation would be an unmitigated disaster for our economy.

 

Where does the money come from?

 

First, it is important to understand that banks do not directly loan the majority of the mortgage money in existence.  This money comes from secondary market investors in the form of their purchase of mortgage-backed securities (MBS).  While securitization has taken a beating in the media over the past year, it is important to remember that not all MBS are collateralized debt obligations and exotic derivative products.  Today, the overwhelming majority of secondary market investment comes from investor purchases of government-backed MBS in the form of FHA and GSE (Fannie Mae and Freddie Mac) loan pools.  Already, such securitizations are under a considerable amount of strain – and for obvious reasons.  The international economy continues to operate under extreme stress.  Potential purchasers of MBS have greatly reduced capital access and are under pressure to make sound investments that will perform well in the short-term, as well as over time.  The American economy, upon which the strength of MBS ultimately rests, continues to face a variety of challenges.  Specific to MBS performance, continued job losses, declines in home values and questions regarding the underlying strength of major financial institutions are drawing ambiguous answers from even the most astute observers and analysts. 

 

Understand, next, that secondary market investor purchases of MBS are the source of funding for mortgage loans.  Absent these successful securitizations, the flow of money stops.  Today, these securitizations are made possible only due to the now-explicit guarantee of such securities by the federal government.  Absent this guarantee, purchases of MBS are simply too risky to attract the prerequisite capital.  If you think things are rough now, imagine an economy where the flow of mortgage dollars simply stops, cutting off any possibility of mortgage refinance, purchase and, therefore, of sale.  In this worst-case scenario, all citizens are equally impacted up and down the economic spectrum.  Need to refinance to lower your monthly payment or move from an adjustable rate to a fixed rate loan?  No option.  Looking to purchase a home?  No option.  Pay your mortgage just fine, but need to sell your home due to a job transfer or downsizing?  Sorry, no option if prospective purchasers cannot obtain financing.

 

Just like your father said, money does not in fact grow on trees.  It has to come from somewhere.  It can come from investors in the secondary market, or it can come from the taxpayer in the form of a completely nationalized mortgage finance market.  Today, the market is partially nationalized in that MBS are explicitly backed by taxpayer dollars.  Again, absent this explicit guarantee, the flow of investment dollars into mortgage-backed securities, and hence residential mortgages, would grind to a halt.  Take a moment to ponder the repercussions. 

 

Question for our Congress

 

Ironically, and perhaps I should expect nothing better at this point, the mainstream media has labeled this proposal as ‘help for homeowners’.  In reality, this proposal would be a disaster for homeowners.  Which leads me to pose this question to Barney Frank and other members of congress:

 

Do you understand the consequences of passing this legislation into law?

 

The first and immediate consequence would be a dramatic surge of bankruptcy filings, clogging the courts and further delaying any hope of bottoming out the decline in home values or in the overall financial economy.  Debtors and creditors alike would be put into a state of suspended animation as the courts worked through this tsunami of new filings.

 

The next repercussion of passing this poorly thought out legislation into law would be a dramatic increase in mortgage rates, and therefore a big increase in monthly mortgage payments for new home buyers or those looking to refinance.  In other words, we would get exactly the opposite of what these same ‘representatives’ have been working towards for over a year now.  Instead of ‘affordability’, we would see the opposite – and with increases in mortgage rates, the deflation of home values would continue unabated.  The reason for this is simple.  If investors’ principle can be written down arbitrarily in court, these same investors must seek a higher overall return to compensate for increased principal risk.  If the increase in principal risk is perceived to be dramatic, increases in overall yield must be equally dramatic.  If the increase in principal risk cannot be quantified, overall yield demanded will likely be higher than anything we have seen in a generation.  As with any security, an investor expects lower return with a low-risk investment, but seeks higher return for greater risk.  Allowing bankruptcy judges across the country to reduce principal owed on primary residential mortgage transactions injects unpredictable risk into the risk/reward calculation of investors.

 

Worse still is this same congress’s likely reaction to rapid increases in mortgage rates and/or declines in securitizations.  More than likely, in reaction to contracting supply of investment capital, congress will step in to make investors whole.  Recent trends would support this hypothesis.  In very simple terms, if a $150,000 mortgage obligation is reduced by a bankruptcy judge to $80,000, congress will step in with the difference.  The difference, of course, will come from your tax dollars.  Remember once again that government does not really have any money.  The only money government has is that which is confiscated through taxation, or that which is borrowed.  Either way, this is paid for by the tax payer – either through increased rates of taxation, or through inflation: the ‘stealth tax’ on every dollar held or earned.  Once these economically illiterate career politicians realize they have just killed the market for mortgage-backed securities, they will need to revive it.  As we have seen, they will feel compelled to ‘do something.’  The thing to do will be to prevent investors from taking losses on risk that was added after the fact.  In other words, when investors bought these securities, they did so with the understanding that principal could not be written down in court.  They are unlikely to throw continued good money after bad.  To keep the secondary market dollars flowing into mortgages, government will have to make these investors whole, or at least severely limit the haircut they will take.  Whether that means paying out $70,000 in our example above, or perhaps only paying out $50,000, it is clear that secondary market investors will get something or the flow of investment capital will stop.

 

And this leads to the third repercussion.  Unless government steps up with further guarantees, the flow of investment capital into the mortgage-backed securities (which serve as the feeder mechanism for mortgage loans and therefore mortgage lending as we know it) will shut down.  This will have a devastating impact on the overall economy and greatly exacerbate all of the negative dynamics already in play.  Home sales will grind to a halt.  Mortgage delinquencies will skyrocket beyond anything we have ever seen.  Both bank and non-bank lending operations will be out of business.  The foreclosure rate and all of the associated problems that go with it will climb to uncharted territory.

 

A lose/lose for taxpayers

 

Either way, this is a lose/lose proposition for tax payers.  If mortgage funding dries up, the repercussions for the overall economy in which we live and work as both consumers and producers will go from bad to much, much worse.  If government steps in to keep investors whole and subsidize the flow of capital into mortgage-backed securities, it will be taxpayers who bear the ultimate burden not just in the short-term, but for generations to come.

 

The case for deflation

 

Clearly our ‘representatives’ have a very limited understanding of how finance works.  But what is the answer?  The only way out of this capital markets crisis is the exact opposite of the efforts of our government for the past two years.  Instead of supporting measures to reinflate a debt and credit bubble, and to recreate price and credit inflation that was unsustainable, we must support the deflationary dynamic and allow the market to weed out the inefficient and the unsustainable.  Prices simply must deflate to sustainable levels if we are to reach a transparent bottom.  Only from this bottoming-out can we seek to rebuild a healthy, functioning and sustainable financial economy with rational flows of capital and sustainable levels of debt.  As we have seen virtually every day for the past two years, all efforts of the federal government to reinflate are doomed to failure.  Worse, however, is that the efforts of the government to reinflate create a variety of long-term unintended and unpredictable consequences. 

 

Within this great deflation there will be pain.  There will job loss and home loss.  There will be bank failures and bankruptcies of inefficient business models in a variety industries.  But these will come at a rapid pace and the pain will be over quickly.  Strong businesses will absorb the weak.  Creditors will be punished for their lack of due diligence.  Stockholders will be punished for their casino mentalities.  But as the strong devour the weak, the end result will be finding a transparent bottom and a solid foundation upon which to rebuild a sound economy.  Current government policies only exacerbate the problem and make finding a bottom more elusive.  Efforts to forestall the inevitable only drag out the bottoming-out and recovery process, creating more pain for all.

 

Perverse Incentives

 

Perhaps the best case of the real-world consequences of government propping up failed business models is the recent announcement by Sheila Blair that the FDIC risks insolvency in the coming year if the premium fees banks pay into the fund are not increased.  This is a case of the strong being pillaged to support the weak.  Instead of allowing market forces to work on failed business models – in the case of banks this would be investors and depositors moving their funds to solvent institutions – government, through the FDIC and outright capital injections, will support the flow of capital into insolvent institutions by guaranteeing it.  This disproportionately affects smaller, move nimble banks by increasing the fees they must pay to prop up the bloated, non-transparent and virtually insolvent institutions such as Citi and Bank of America.  Further, investor capital is induced based on explicit guarantees of large bank debt.  Why invest in a healthy but smaller bank when your capital will be guaranteed by the government even when invested in an international zombie bank?  Why move your deposits away from a Citi or Bank of America when the government will guarantee them?  Thus are perverse incentives injected into the market through government policy.  The end result, in simplistic economic terms, is the inefficient use of capital.  Understand that this is not the market failing, or making a poor decision.  This is government injecting incentive into the market in favor of inefficiency.  And it will not end well.  Not even government can guarantee a failed business model or an insolvent bank indefinitely.  Sooner or later, reality hits.  And the longer this reality is forestalled, the harder it hits. 

 

Unintended consequence?

 

Sadly, the long-term, unintended consequences of government’s injection of incentive into the market are often very difficult to predict.  In the case of bankruptcy ‘cram-downs’, however, the consequences are quite clear: a dramatic increase in cost, followed by either the disappearance or nationalization of mortgage finance.  Support for such a measure suggests profound ignorance of how the financial market in general, and mortgage financing specifically, works.  Or, such support suggests ulterior motive.  The events of the coming weeks and months will point to which motivates our congress.

Poetic Justice

March 3, 2009

 Greenberg claims he was deceived by AIG

 

Now he says AIG executives fooled him into purchasing shares months before they revealed the insurer was essentially bankrupt

 

Join the club, Maurice.  Now you know how common stockholders (and taxpayers) feel.

 

Greenberg sued American International Group in federal court on Monday, claiming he purchased shares early last year, part of his deferred compensation plan, based on a healthy financial picture provided by his successor, Martin Sullivan.

 

This is rich.  The irony here is that Maurice ‘Hank’ Greenberg worked at AIG for 38 years.  If any one person knew and understood the complexity and risk of AIG’s business model, it was Greenberg.

 

At the time the stock traded for around $54. Today those shares, and much of Greenberg’s fortune, are almost worthless.

 

With a net worth once estimated at $3.2 billion dollars, Greenberg will find few sympathizers.  I doubt any other octogenarian watching their 401(k) savings evaporate before their very eyes will spend much time feeling sorry for Maurice (sorry, I mean ‘Hank’). 

 

But don’t worry, Maurice, you’ll always have social security to fall back on…

 

 

Let them eat cake UPDATE

March 2, 2009

UBS nixes bonuses, but increases salaries

 

Any increase in base salary availalbe to a managing director at UBS still depends on a performance review. But some salaries for senior bankers are being raised to about… $429,000 from $172,000…

 

While this is still less than many made with bonuses included, I wonder how many UBS investors are getting this type of guaranteed return.

 

Here is a chart of UBS stock price decline over the past year.

 

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