alann

Bailout Welfare State => Socialism -- Democrats Seize the Moment

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A bad idea, horribly implemented:

Senate Democratic leader Harry Reid says Congress won important concessions from the Bush administration in negotiating the bill. He says the White House wanted a blank check and lawmakers would not agree to that.
That "blank check" is what Harry Reid and the Democrats want... and wrote into the bill:
Democrats have already decided to spin off potentially billions of taxpayer dollars from the bailout fund to their own political buddies -- not on Wall Street but on nearby K Street."

...

The House and Senate Democratic drafts contain an indefensible and well-hidden provision. It would mandate that at least 20% of any profit realized from the sale of each troubled asset purchased under the Paulson plan be deposited in either the Housing Trust Fund or the Capital Magnet Fund. Only after these funds get their cut of the profits are "all amounts remaining . . . paid into the Treasury for reduction of the public debt."

Here's the exact, amazing language from the Democratic proposal, breaking out how the money would be divided and dispensed:

"Deposits. Not less than 20% of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).

"Use of Deposits. 65% shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act . . . ; and 35% shall be deposited into the Capital Magnet Fund . . .

"Remainder Deposited in the Treasury. All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt."

What we have here essentially are a pair of government slush funds created in July as part of the Economic Recovery Act that pump tax dollars into the coffers of low-income housing advocacy groups, such as Acorn.

Nancy Pelosi named it more accurately:

"...the proposal is not a Wall Street bailout. Instead she calls it a buy-in to help the economy get turned around."
(from AP link, above)

"Buy-in"... In other words, a government take-over of the banks and other financial institutions.

This is colossally bad. It is likely that Bush will sign this monstrosity. If he had any clarity at all on the economic consequences, I would still expect him to weigh that important issue as less than the political one of a "failed compromise" being his fault. But we'll see soon enough. The result will be billions for Socialist advocacy and billions of below-the-radar funds for Democratic campaign contributions. Now that's reform: From Welfare state to Socialist state.

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I've been thinking for some months now that in some crucial respects it really may be later than we think.

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I've been thinking for some months now that in some crucial respects it really may be later than we think.

Me too. Read my latest blog post. The update at the end links to the same article alann links to in his post above.

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I've been thinking for some months now that in some crucial respects it really may be later than we think.

Me too. Read my latest blog post. The update at the end links to the same article alann links to in his post above.

I guess I can't figure out what y'all mean by this... by "later than we think" do you mean that it is actually too late to save America but no one fully realizes it yet?

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I guess I can't figure out what y'all mean by this... by "later than we think" do you mean that it is actually too late to save America but no one fully realizes it yet?

Well, I don't see anyone with the ability, and very few even with the desire, to hit the brakes on the speeding statist locomotive. I'm not sure that the brakes even work any more.

There is no one in government who will refuse to abridge our liberty if they think their cause is "good enough." There are almost no citizens left who think that what we know as statism and they call "government programs" is wrong, and who won't grab more loot if it's offered by what they think are their representatives but are really their overlords. Other than Objectivists and a relative handful of others, who still understands what the constitutional limits on government are, why they are there, and what exists in government today that violates them? More importantly, how effective have those who understand been, and how effective can we expect them to be, in slowing down, let alone halting or reversing, the expansion of governmental control over ever more aspects of not just large-scale activity but detailed individual behavior?

I mentioned this in another thread, but it bears repeating here: When I started work just out of college at AT&T, my father, who had worked there for his entire career, told me that the company was so big (and in his opinion so mismanaged) that it could at that time already be out of business and no one would know it for 30 years. That was in 1983, and look what's become of AT&T and its parts. Is the United States at or past that point already? Well, 30 years isn't all that long a time, so check back with me then. Sooner if necessary.

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See Calling J.P. Morgan in today's Wall Street Journal. There are three big pieces of the puzzle you discuss above. The one of relevance in the WSJ piece is exactly that the "information" people have is not knowledge - not demonstrably connected to real, objective reality. Many so called policy makers are acting on information they want to treat as knowledge. They have, for example, probability weighted estimates of what assets will be worth under given market conditions. What of there is no market, what if the market is wrong, what if the market is driven by forces other than a search for real value - a connection to real economic productivity - are questions they don't even admit. I think a good model for the current situation is Jurassic Park and the delusiuons of the scientists in that. I wish I could find the Mad Magazine cover with the skeletal head of Alfred P. Newman atop a tyrannasaur skeleton. The movie being advertised - Your Ass Has Had It Park.

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I've been thinking for some months now that in some crucial respects it really may be later than we think.

Me too. Read my latest blog post. The update at the end links to the same article alann links to in his post above.

I guess I can't figure out what y'all mean by this... by "later than we think" do you mean that it is actually too late to save America but no one fully realizes it yet?

Yes, although I would not be surprised to discover that many people do realize it without knowing quite what to do about it. I can think of no other instance in history in which a government wielding the kind of extraordinary interventionist powers over the lives of its citizens as does the U.S. Federal government (and to a slightly lesser degree, the State and Local goverenments) -- and most of these though certainly powerful did not have the sheer array of powers exercised by the Fed -- giving it up or reversing course willingly and peacefully. This presidential election, more than any other in my lifetime, has brought this into sharp relief for me which is the central reason why I have chosen not to participate in it. In addition, although I haven't confirmed it yet, I got wind of a report this morning that the Federal government has decided to use various branches of the U.S. military internally to "help out". If true, I find this to be a very ominous development indeed. And yet, it would be consistent with the kind of inexorable totalitarian flow that characterizes current developments, and I suspect things are going get far worse than they are today before there will be any chance for a reversal.

I do hope that I'm wrong, that perhaps I've misinterpreted things; however, I plan to hold on to my own hat just in case and, although the role of Cassandra doesn't really suit me, to speak out whenever I can.

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I'm on the fence as far as whether America will turn around. However, the problem with applying history is that America has no precedent, it's the first of its kind. That has to count for something.

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In addition, although I haven't confirmed it yet, I got wind of a report this morning that the Federal government has decided to use various branches of the U.S. military internally to "help out".

Can you post a link if you find a good article on that?

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I've been thinking for some months now that in some crucial respects it really may be later than we think.

Me too. Read my latest blog post. The update at the end links to the same article alann links to in his post above.

I guess I can't figure out what y'all mean by this... by "later than we think" do you mean that it is actually too late to save America but no one fully realizes it yet?

Yes, although I would not be surprised to discover that many people do realize it without knowing quite what to do about it. I can think of no other instance in history in which a government wielding the kind of extraordinary interventionist powers over the lives of its citizens as does the U.S. Federal government (and to a slightly lesser degree, the State and Local goverenments) -- and most of these though certainly powerful did not have the sheer array of powers exercised by the Fed -- giving it up or reversing course willingly and peacefully. This presidential election, more than any other in my lifetime, has brought this into sharp relief for me which is the central reason why I have chosen not to participate in it...

But you are going to participate whether you like it or not -- one of them is going to be in power. Do you prefer a Pragmatist with at least some semblance of an American sense of life and values with some adherence to goals like keeping taxes down, or do you want an erudite, intellectually trained progressive leftist with intellectual, emotional and political ties to militant, racist socialists? We don't want either one of them, but that is the current choice in reality. This is not an academic debate -- you are going to have to actually live under one of them.

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"Bailout goes down to Defeat in House Vote"

Oh, yeah, that other house of Congress. Yay!

This is only a breather; they very well could come up with some "compromise" atrocity, but this separation of powers is the only thing between us and the complete hijacking of our freedoms in one swell foop... And it worked.

(sigh!) I can only afford a small one... where politicians gather, stupid things will happen.

And, By the way, this concrete example demonstrates dramatically the falsity of the assertion that a Republican presidency will guarantee that a Republican-sponsored Socialist bill would get a free ride through Congress. Both Bush & McCain can "reach across the aisle" -- even make it a 2nd home, financed by Fannie May -- but they will never be part of the club. (Isn't this a form of profiling? Shouldn't the ACLU get involved?)

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Via LGF : Where the 700 Billion Dollar figure came from

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

They made it up to be sufficiently ginormous to frighten everyone into rapid action.

And it worked.

I was certain that it was a satiric article at first... It seems that reality can be weirder than imagination sometimes.

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In addition, although I haven't confirmed it yet, I got wind of a report this morning that the Federal government has decided to use various branches of the U.S. military internally to "help out".

Can you post a link if you find a good article on that?

Try this.

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My favorite daily dose of "unbiased" Leftist AP "journalism:"

But the drumbeat of bad news rattled on. A government report said that orders to U.S. factories plunged by the largest amount in nearly two years as the credit strains smashed manufacturers with hurricane-like force.
Really! 2 whole years!! I'm sure glad I wasn't alive way back then, 2 years ago, when the rubble of "smashed manufacturers" lay all around and orders to U.S. factories previously "plunged" to abysmal levels as low as today's. Wow! That must have been Hell on Earth... Oh, yeah, I was there... I don't remember the "smashed" manufacturers of the time, but maybe she just means "drunk."

Julie Hirschfeld-Davis does it again, with her Quick-Quotes Quill.

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My favorite daily dose of "unbiased" Leftist AP "journalism:"
But the drumbeat of bad news rattled on. A government report said that orders to U.S. factories plunged by the largest amount in nearly two years as the credit strains smashed manufacturers with hurricane-like force.
Really! 2 whole years!! I'm sure glad I wasn't alive way back then, 2 years ago, when the rubble of "smashed manufacturers" lay all around and orders to U.S. factories previously "plunged" to abysmal levels as low as today's. Wow! That must have been Hell on Earth... Oh, yeah, I was there... I don't remember the "smashed" manufacturers of the time, but maybe she just means "drunk."

Julie Hirschfeld-Davis does it again, with her Quick-Quotes Quill.

I think a Leftist typewriter has one key, and it's labeled "hyperbole".

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From http://foxforum.blogs.foxnews.com/2008/11/...o_1125_bailout/ :

The Bitter Fruit of an Unconstitutional Bailout

By Andrew Napolitano

FOX News Senior Judicial Analyst

... history will be angry at them and their colleagues for betraying the Constitution. Their attitude underscores the reasons that the Constitution does not repose in the Congress the power to bail out individuals or private industry: Bailouts violate the Equal Protection doctrine because the Congress can’t fairly pick and choose who to bail out and who to let expire; they violate the General Welfare Clause because they benefit only a small group and not the general public; they violate the Due Process Clause because they interfere with contracts already entered into; and they turn the public treasury into a public trough. Worse still, Congress lacks the power to let someone else decide how to spend the peoples’ money.

...

This delegation of power to the secretary directly violates a basic principle of constitutional law: Delegated powers cannot be delegated away. The Constitution delegates to the Congress the power to write all federal laws specifically related to spending, to the president the power to enforce those laws (and he must spend as the Congress ordains), and to the courts the power to interpret the laws (and they usually stay away from issues of spending). The Congress can no more delegate to the secretary of the treasury the power to decide how to spend billions than the president could delegate to the Congress his power to appoint the secretary.

Congress can’t cede power to the executive branch because Congress and the president are powerless to change the delicate balance among the three branches of government which the Constitution created. Such an unconstitutional delegation of power — such a role reversal — is tantamount to a constitutional amendment which only two thirds of the Congress and three quarters of the states can enact.

The secretary of the treasury can spend all the peoples’ money he can get his hands on. He can buy all the stock he wants in all the solvent banks that don’t need it and don’t want government investments and the strings that come with them. He can bail out and try to manage all the corporations his advisers recommend whose executives made millions but lost billions. But he is exercising power unconstitutionally given to him by the Congress, procured with only ten hours of debate and hearings, and the very premise of which he unilaterally rejected afterwards...

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From http://foxforum.blogs.foxnews.com/2008/11/...o_1125_bailout/ :

The Bitter Fruit of an Unconstitutional Bailout

By Andrew Napolitano

FOX News Senior Judicial Analyst

... history will be angry at them and their colleagues for betraying the Constitution. Their attitude underscores the reasons that the Constitution does not repose in the Congress the power to bail out individuals or private industry: Bailouts violate the Equal Protection doctrine because the Congress can’t fairly pick and choose who to bail out and who to let expire; they violate the General Welfare Clause because they benefit only a small group and not the general public; they violate the Due Process Clause because they interfere with contracts already entered into; and they turn the public treasury into a public trough. Worse still, Congress lacks the power to let someone else decide how to spend the peoples’ money.

Is anyone going to bring a suit to get the bailout declared unconsitutional?

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------------

Is anyone going to bring a suit to get the bailout declared unconsitutional?

Does it really make a difference? I can't imagine the Court rejecting the bailout when so much of the welfare state, government funding and programs are unconsitutional for the same reasons. Any court that upholds campaign finance restrictions on free speech and eminent domain for shopping centers will not challenge any basic premise of today's social fabric.

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I can't imagine the Court rejecting the bailout when so much of the welfare state, government funding and programs are unconsitutional for the same reasons. Any court that upholds campaign finance restrictions on free speech and eminent domain for shopping centers

... or the draft not being involuntary servitude ...

will not challenge any basic premise of today's social fabric.

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