CEO Bailout: Congress Extracts Their Pound of Flesh

Today, 11 FEB 2009, Congress is interrogating the Banking Industry. It is being broadcast live on CNBC and is quite telling of the lack of quality of politicians we have sent to Washington.

The CEO Bailout (TARP) should never have happened in the manner it did. It was a key point in assessing the Campaign to send a Common Sense Citizen to represent the 6th District. Representative Gordon voted for the bill and there was little choice in who to replace him with. The only other person on the ballot in 2008 had received virtually no press in the media.

Things to consider in this are that Banks did not have opportunity to "opt out" of the hostile takeover by Government. I opposed the CEO Bailout privately from the beginning, from the point we discovered the details the House of Representatives first voted on. The Senate only made it worse.

The US Congress decided to force banks to hand over Preferred Shares of their Corporations and take money in return. Preferrred Shares pay dividends but afford no voting rights, no decision making capacity.

Today, one Congressman (I didn't recognize him) demanded that the Common Shareholders of the banks be paid NO dividends until TARP money is returned. Common Shareholders are Americans that have invested their money in the the Corporations. They are the ones taking the risks, the ones that have paid for voting rights, and who have been hurt most in the banking industry downturn.

When Congress demands shareholders be short changed by a lack of dividends, they are removing the money that Retirees count on for their month to month income.

For Congress to chastise any organization for operating in the red, for spending more than they make is pure hypocrisy. The US Government has operated on Debt since Andrew Jackson was President. And while not all debt is bad debt, this Congress and its predecessor have implemented and continue to implement the greatest increase in the history of Our Nation.

The same Congressmen chastising the Banking Industry for a few bad quarters have voted for two quarters of deficits larger than any year EVER in our history. The same Congressmen that demanded banks loan money to unqualified individuals in the 90's and early days of this Century are now demanding to know why more money has not been lent and why those earlier loans went bust.

In the interests of full disclosure, I own common stock in a bank, Regions Financial and previously owned stock in Bank of America. My opinions as a shareholder differ from my opinions as a taxpayer. As a taxpayer, I'm appalled that I was forced into debt by Congress so they could create an Investment firm. As a shareholder, I expect the CEO's salary to reflect his success or failure. I believe in the Lee Iacocca model: if you lose money, you don't get paid as the CEO.

I sold my BoA stock because they were going down the wrong road in my opinion. I neither had as much as did the Clintons, nor did I time the market as perfectly as did they.

As a shareholder, I want banks to act appropriately, to make decisions that will make money and to do so morally. If a corporation is a good corporate citizen, it will make more money. If it treats its employees, its customers, and its suppliers right, it will be successful. Greedy companies will lose in the long run.

I don't want the US Congress running corporations. Their job is to set the rules by which companies run, not to run them. The US Congress has an abysmal record of running things, particularly when it comes to money.

But today, Congress is teaching their Corporate Constituents a lesson: all things come with a price. The banks may not have had opportunity to reject Federal money, but that money came with strings and a bear hug while politicians put that long dagger in the backs of the Banking System.

And Congress has really broke one off in the Banking Industry. They first forced the money (borrowed in your name) on the banks. Then they set penalties if it is returned before three years is up. Now they are demanding billions in dividends be given the Government while at the same time demanding that Roths, IRA's, and Investors be shortchanged of their dividends. Like any other bully, major shareholder, the US Congress is demanding their way.

Unfortunately, Congress is full of lawyers, not businessmen. This is not the time to be selling jets. It's a time to be buying jets from those hurting for cash. Just as the best deals are from those in dire straights by those that have planned for them, so too is now a good time to be getting good deals on jets, construction equipment, and cars.

Meanwhile, the Senate has announced the finalization of the Debt Stimulus bill. I'm proud to say our two Senators voted against it. The Debt Stimulus bill adds another record amount of debt to our Nation. More debt than either of the two quarters of debt, each of which would have been an annual record on its own. I doubt Our Representative, a whipped "Blue Dog Democrat" will vote against it this time, given his record of voting for it previously.

TNTaylor©2009, TennesseeTaylor, all rights reserved.

How Would You Spend YOUR Money?

Let's consider for a second the sheer size of the Debt Stimulus Bill, which purports to "stimulate the economy." At current, it is $939 Billion as compared with expected tax revenue of $2.7 Trillion which has already been appropriated for spending, and it doubles the amount we have already added to the deficit in 2009, in two quarters, each of which would have been a record deficit.

When one considers that the Debt Stimulus Bill would spend 1/3rd of all tax revenues and that only 1/2 of tax revenues are actually apparent on our pay stubs, we can more accurately identify what this means to your finances by looking at your 2008 W2.

This bill is nearly equal with ALL Social Security tax revenue, 1/2 of which is seen on your paystub. If you look at your paystub, double the amount withheld, that is your portion of the Debt Stimulus Bill.

It is also equivalent to more than 75% of all Federal Income Withholding taxes. Look at your paystub and imagine what you could do with that amount of money in your wallet. That is how much debt, Representative Gordon is voting to add to your bill.

Now, if you are going to go into debt by that much, do you want that money spent on dogparks, condoms, AmTrak, and a new power plant for Consolidated Edison in Illinois, or would you spend it on something that would be more beneficial to you.

And if 145 Million Americans had that much more money in their wallets to spend on what mattered most to them. That would certainly stimulate the economy and ease their financial woes. The US Congress has the power to put that money in your wallet by the end of the month. The US Congress could simply reduce all Federal payroll taxes by 75%, costing less money to the Federal Government while more positively effecting your bottom line and not paying all the bureacratic middlemen in the process.

If, on the other hand, they wished to collect the money and then redistribute it to you after paying those middlemen, look back at the W2, and imagine a check for 1/3rd of what you paid in last year, rather than 75% of it. Regardless of whether Congress spends your money on Condoms, Dog Parks, Bureaucrats, or simply doesn't collect if from you, it will cost you the same amount in debt, but it costs more for the monolithic monopoly to process that money than to "allow" you to keep it in the first place.

TNTaylor©2009, TennesseeTaylor, all rights reserved.

Success of the Government Monopoly

The United States is a Corporation. The US Constitution are the Articles of Incorporation. The US Congress is Our Board of Directors and the President is the Chief Executive Officer. We, the People, are the shareholders, the owners, and the customers.

But the US Government is also a monopoly. When we don't like the product, we don't have the option of shopping elsewhere. When we don't like the price, we don't have an option of not paying. We do have the option of changing the Board Members and the CEO.

Our Founding Fathers understood these principles and hence designed the Federal Government to have limited power, preferring the State Governments to hold the reins, as each state competed for citizens and responded to the expectations and desires of its citizens, its customers and owners.

Government is a necessary evil. But what is the scope of its purpose? To provide those services which necessarily cannot be provided through any but the combined efforts of the Nations Citizens. To provide for the National Defense and for Foreign Relations.

The Federal Government has no Constitutional Authority to set up dog parks in municipalities nor to open the Treasury to ACORN for "neighborhood stabilization." The Government is not being benevolent when it returns taxpayer money to taxpayers. It is far more efficient to simply not take the taxes than to take the taxes, pay a multitude of money counters, bureacrats, administrators, and politicians, then return what's left over to the victim removed from the fruits of his labors.

There are things which do fall within the scope of responsibility of the Federal Government but buying digital converter boxes from China for a few Americans is not one of them. Buying F22 Raptor Fighters for the US Navy and US Air Force from American Manufacturers to deter a war with China or North Korea is within that scope of responsibility. Buying new Re-Fueling Tankers for the US Air Force and hence employing tens of thousands in Mobile, Alabama is within that scope of responsibility.

TNTaylor©2009, TennesseeTaylor, all rights reserved.

Taxes For Condoms Or Fighters?

From War On Terror News:

But we are in a time of economic crisis and the far left of the DNC: Frank and
Murtha are calling for cuts in Military Spending to the tune of 25% while the
President himself looks more moderate in his calls for the Joint Chiefs to plan
for cuts of 10%. This sets the stage for current programs to be cut
substantially and has politicians scrambling to ensure the programs in their
states are not cut.

It seems that President Obama and Congress are actually considering throwing 10,000 to 100,000 workers into the unemployment lines by not continuing the funding and acquistion of our National Defense in the form of the F-22 Raptor program. At the same time the Senate is adding Hundreds of Billions in more pork to the Debt Stimulus Bill, in addition to Pelosi's Condom Stimulus stake, they're possibly going to undermine the future defense of our Nation and the economy by ending this program that Aviators and Admirals need. "Ask the Jet-Jockies"

We need the Blue Dog Democrats to join the bi-partisan group which includes even Ted Kennedy in calling for this and all Defense to be funded.

To get the numbers straight from those most committed to saving this program and
send a message to YOUR politicians to get on board with preserving this program, you can visit this site, which has letters ready to send out to all that need to hear from you.

It is near criminal that Our Politicians continue to ignore the will of the people as well as their Constitutional duties to defend this Nation while adding 10-20% to the National Debt in 12 short months, for CEO Bailouts, UAW Bailouts, and Condom Stimulation programs. The Debt Stimulus Bill has become the greatest pork project of the Congressional Record.

But be sure to look around the internet, at what other Veterans are saying and noticing about the new Congress and The Party in Power.

Stimulating the National Debt

It has been proven many times over that when one party controls both the Congress and the Executive that spending increases. Never in our history have we seen spending go so completely out of control so quickly as to prove this so quickly. The 111th Congress has moved quickly to establish its partisanship and Speaker Pelosi continues to whip the Beaten Blue Dogs into line.

The media has picked up on my analogy of Congress as College Kids spending on their parents credit cards. Without factoring in the Stimulus Plan, the deficit is already expected to break records in 2009. We're seeing the effects of the CEO Bailout, the UAW Bailout, combined with "run of the mill" out of control spending already:

WASHINGTON – The Treasury Department said Monday it will need to borrow $493 billion in the first three months of this year, a record amount for the January-March period.
The Treasury Department figure comes on top of $569 billion the government borrowed from October through December, the all-time high for any quarter. AP 2009 Feb 02

To give you some perspective, we had to borrow money to force taxpayers to buy into banks we didn't want to pay those Billions in bonuses to the CEO's already. The $1.062 Trillion we will have borrowed in the first six months is already more than any other deficit in our Nation's History. And this does not include the stimulus package.

The Debt Stimulus package is approximately $5,600 PER taxpayer, all debt, all the time. Or about $2,730 PER American, including each of those new octuplets recently born, all debt, before interest.

Both the Stimulus Package and the CEO Bailout Bill are more than we spent in 5+ years of War in Iraq, by hundreds of billions EACH. Both are greater than the largest single budget item: Social Security which sits at $644 Billion. The Debt Stimulus package is 3.15 times what we pay in interest on the debt already accrued.

The Government estimates it will collect only $2.7 Trillion this year and has already approved spending $3.1 Trillion before the Stimulus and before the UAW Bailout and before the CEO Bailout. In fact, the 3 supplemental spending bills will be more than 3x what the deficit already was budgeted for in 2009. And we borrowed more in the first quarter of the fiscal year as was budgeted to borrow for the entire year. We will borrow more in the second quarter of the fiscal year than was budgeted for the entire year, before the Debt Stimulus package.

One is forced to wonder if The Party (DNC) is purposely attempting to bankrupt the Federal Government.

On the other hand, an economic stimulus package is needed, not an $819 Billion pork spending package. Increased spending on condoms should be left to individuals, not the Federal Government. We need to prioritize our spending but cutting the Military during a time of War is not the answer. Whether Murtha and Frank get their 25% or Obama cuts the DoD by 10%, this will cost jobs, not increase them. It will put more people on the unemployment rolls.

Obama promised to fully support the Troops in his first visit to the Pentagon and again in his Superbowl message to Troops:

“All of you who are serving in the U.S. armed forces are going to have my full
support, and one of my duties as president is going to be to make sure that you
have what you need to accomplish your missions,” he said.

That is not accomplished by cutting the DoD budget as he told the Joint Chiefs to plan for during the same visit. Politicians are paid to decide the ratio of spending on bullets to beans, but instead Our Congressmen are choosing to buy condoms. Somehow, I don't think Trojan is in trouble.

So long as Speaker Pelosi can keep the "moderates" in line, she has no need to cross the aisle. Sadly, Our Representative is toeing her line. The Party (DNC) has absolute power and she is expressing the CA Idealists ways.

Mike Huckabee noted on his new Fox Show that $1 Trillion dollars would buy Microsoft, Google, Apple, Coca-Cola, and Pepsi all and completely. Glen Beck showed us a chart that demonstrated the new Treasury Secretary's plan to print more money. I haven't found a source for his numbers, but if they are accurate, it would appear that soon everything will be worth half of what it currently is.

I fully expect that the Debt Stimulus Bill will pass and be signed by President Obama. It will have made it to his desk with Representative Gordon's vote, at least in the first round. There will likely be a second round after the Senate gets done with it but it's unlikely to have the fat trimmed off of it. The last time, the Senate merely increased the fat (CEO Bailout Bill).

And the UAW Bailout Bill saved no jobs either. The Auto Companies still cut back on parts orders and production, despite the $17 Billion. They did so, because Americans aren't buying their cars and padding the wages of the 70k/year UAW members only increases their ability to buy a new car on the backs of their customers who still can't afford their product.

Their pleas to save the jobs of waitresses paid in tips by auto parts supplier's workers were nothing more than marketing and advertising for their own overpaid salaries.

So, if the Debt Stimulus package passes, who will first see the recovery? Other than Trojan, construction companies. Not the homebuilders, the commercial and industrial companies. A portion of the bill is dedicated to infrastructure improvements and school construction. It will have an effect, but not the effect that should be expected by $819 Billion, because too much is dedicated to programs that have no business being included in "economic stimulus."

Perhaps it's time for our Congressmen to cut their own salaries back to the $1/year they have demanded of CEO's, until they can get their spending under control.

United Nations

My feelings on the United Nations are almost exclusively negative. It was a good concept hi-jacked by less than pure motivations. It pays the Professors of Corruption. It is an International Welfare system transferring finances from the richest Nations to the most corrupt poor Nations. It is a bed of spies inside our borders.

Having seen the UN in inaction, my views of it are solidified. But, there's an old saying:

"Keep your friends close and your enemies closer."

There can be no doubt that the United Nations is no friend of its host, the United States. In contrast, it is a leech, a parasite feeding on our Nation. It hides its contempt for us poorly. But the damage of that anti-American sentiment is held in check by our role on the Permanent Security Council.

There are many that say we should pull out of the UN and kick them out of the Nation. While I would like to see the UN move to Switzerland, pulling out of the UN and hence the Security Council would have a long term negative effect. The UN would not cease to exist and would be left unchecked to pass resolutions against us.

But the relationship between us and it needs revision in both perception and finance. Though I congratulate President Bush for reducing the UN Tax on the US (our annual dues), this needs to be reduced further. Simultaneously, since we continue to be the largest financial contributor, we need to exert greater influence over its programs, including the end of anti-American propaganda by it.

The body politic needs to embrace the reality that within our borders, the US Constitution, not the UN Charter is the highest law. Citizens, Politicians, and Nations need to realize that we are a sovereign nation, not a subordinate state to the UN. Unfortunately, many of our own politicians, principally those California Idealists and New York Elitists seem to think otherwise.

The UN is a voluntary membership body designed to avert wars by creating a global dialogue of Nations. In that role, it has had some successes and at least as many failures. But in its attempted growth into a supreme government over Nations, it has overstepped its bounds and we must reject its measures to inflict its will on US Sovereignity. That is best done from our current position on the Permanent Security Council.

But just as the USSR learned in the 1950's when they walked out, leaving the UN can have long term negative consequences. We can't afford to allow our opponents the bully pulpit of the UN unchecked, but we need to exert the power our financial role in it has paid for and we've not generally used.