April 5-6, 2009
Apr 05 06:45 Control Freak Update, Part II Apr 05 12:47 What've You Done Lately? Apr 06 00:16 Let's Dispense With the Niceties Apr 06 07:14 And He Huffed And He Puffed... Apr 06 08:43 President Obama's Budget Apr 06 13:50 That's the Problem
Control Freak Update, Part II
Stuart Varney's WSJ op-ed is must reading. Mr. Varney's op-ed prominently includes Judge Napolitano's story which I posted about here . Here's what Mr. Varney wrote:
Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.King Banaian notes here that TARP monies didn't exclusively go to troubled banks:
Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.
"TCF has always been well-capitalized with adequate liquidity to facilitate lending through our strong retail deposit franchise. By participating in this program, we can expand lending beyond our previous growth plans," said William A. Cooper, TCF Chairman and Chief Executive Officer.Here's a transcript of Greta van Susteren's interview of TCF CEO Bill Cooper:
VAN SUSTEREN: Bill, I was hard on another bank, Northern Trust, because it took some money and then had a big, fancy party. And they said we never meant to take the money. We didn't need it. It was forced on us.This gets back to what I said in my previous post about the oxymoron of "I'm with the federal government and I'm here to help you." The Obama administration apparently has modified that to say " I'm with the federal government and I'm here to make you an offer you can't refuse."
Talking to you, was money almost forced on the banks? Explain that to me.
COOPER: In the banking business, when a regulator makes a suggestion, they say "jump" and you say, "How high?" And it was put to us that only the strong banks were going to get this money and it was going to be for the good of the economy so that you would be able to lever that money and make loans to customers and so forth.
The Obama administration's actions, whether it's Tim Geithner asking Congress for the authority to take over any firm that he deems critical to the economy or whether it's Barney Frank submitting legislation that would allow Treasury to regulate the wages and salaries of all employeess at banks that accepted TARP funding, it's apparent that this administration isn't interested in simply regulating the banking industry.
This administration's ultimate goal is to centralize power in the federal government.
Rest assured that the Obama administration's lust for power will start a political backlash. CEOs that contributed before won't contribute now. They see the vigor with which the Obama administration is pursuing control through overregulation and legislation.
Given their brief history, CEOs contributing to the Democrats or President Obama's presidential campaign can't be certain that they aren't contributing to their being turned into President Obama's puppets. These CEOs can't be certain that these aren't just the first steps of the Obama administration.
Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I'm an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration's goal of controlling the financial system.If you're thinking that this is only about control, though, you're missing a key element, which is the Obama administration's financial gains through TARP, which is explained nicely in this article :
Lawrence Summers, a top economic adviser to President Barack Obama, pulled in more than $2.7 million in speaking fees paid by firms at the heart of the financial crisis, including Citigroup, Goldman Sachs, JPMorgan, Merrill Lynch, Bank of America Corp. and the now-defunct Lehman Brothers. He pulled in another $5.2 million from D.E. Shaw, a hedge fund for which he served as managing director from October 2006 until joining the administration.That's before taking into account what President Obama recently told bankers during a White House meeting :
Thomas E. Donilon, Obama's deputy national security adviser, was paid $3.9 million by the power law firm O'Melveny & Myers to represent clients including two firms that receieved federal bailout funds: Citigroup and Goldman Sachs. He also disclosed that he's a member of the Trilateral Commission and sits on the steering committee of the supersecret Bilderberg group. Both groups are favorite targets of conspiracy theorists.
And White House Counsel Greg Craig earned $1.7 million in private practice representing an exiled Bolivian president, a Panamanian lawmaker wanted by the U.S. government for allegedly murdering a U.S. soldier and a tech billionaire accused of securities fraud and various sensational drug and sex crimes.
But inside the meeting, which was held in the state dining room, it was clear the CEOs took different approaches. The bluntest was from Ken Lewis, the chief executive of Bank of America.Let's summarize things. We have firsthand proof that:
"Mr. President, I am not going to suck up to Larry and Tim like the rest of these guys," Lewis said, according to sources in the meeting. Lewis was referring to Treasury Secretary Tim Geithner, and Lawrence Summers, the head of the National Economic Council, who also attended.
Obama laughed along with the rest of the CEOs, before listening to Lewis get to his point: he wants to pay back Troubled Asset Relief Program funds.
And he was not the only one.
Jamie Dimon, the CEO of JPMorgan Chase, arrived with check in hand to give to Geithner before the meeting started, according to the participant. Geithner took the check briefly to examine it before handing it back. (The check was fake).
Dimon tried again later during the meeting, telling the president he would like to give back his $25 billion in TARP money.
The overall tone of the meeting was cordial, participants said, with no raised voices or significant tension. Obama's message was essentially one of mutual dependence: we need you, and you need us.
"My administration is the only thing between you and the pitchforks," Obama said.
- President Obama is using stress tests to prevent properly capitalized banks from repaying the TARP monies;
- President Obama made a not-so-veiled threat to bank CEOs;
- Barney Frank's Pay for Performance Act, which "just passed the House", is an attempt to control every aspect of banks who've accepted TARP funds;
- and Tim Geithner has asked for legislation that allows him to seize control of any corporation deemed important to the US's financial system.
I hope more CEOs join in Ken Lewis's fight against this corruption machine. Additionally, I hope people on Main Street realize the extent to which this administration wants to control their lives through this nation's financial institutions.
It's time everyone joined in and said "NO MORE!!!"
Posted Sunday, April 5, 2009 6:54 AM
Comment 1 by jaxon at 05-Apr-09 01:53 PM
Obama at the G20 jointly produced a document to control "all firms" on the earth. It is not just the banks. They claim power over any firm 'essential' to the economy.
http://tinyurl.com/freedomnotfree
What've You Done Lately?
According to Sherman Frederick's column , Harry Reid better hoep Nevadans don't start asking that question because he doesn't have a good reply:
But today I want to square up once and for all on the bogus "r-u-stupid" argument advanced by the Reid camp.Reid's record is "ho-hum at best" because he's ho-hum at best. There isn't anything memorable (in a positive sense) that he's done that I can think of. In fact, the only things that Sen. Reid is famous for is declaring that the Iraq war was lost and declaring that he'd engineered the defeat of the Patriot Act.
When Reid supporters play the stupid card I tell them, "OK, I'll drink the Kool-Aid...if you can tell me exactly how his 'power' has benefited Nevadans."
The answer always is pregnant silence.
That's because Reid's power so far has done more for Reid personally than it has for Nevadans as a whole. He's got a big office. He can pick up the phone and ask Nancy Pelosi and Chris Dodd for directions. But he can't honestly say his power has made a difference in the lives of Nevadans. He's delivered to Nevada about what any senator should deliver through the screwy Washington patronage system. As for using his power to make important changes in, say, a broader job base for Nevadans, Reid's been ho-hum at best.
He's done nothing to make Nevada more business-friendly. He's bought into the job-killing cap-and-trade legislation that threatens America's prosperity. He's done next-to-nothing in terms of a libertarian agenda. In fact, he's voted for a number of things that libertarians should be appalled at.
If Republicans recruit a solid candidate (they won't even need a great candidate) between now and December, 2009, they'll stand a good shot at defeating Dingy Harry.
Posted Sunday, April 5, 2009 12:51 PM
No comments.
Let's Dispense With the Niceties
Yesterday, I heard another person talking about whether Curt Schilling should be a first ballot Hall of Famer. Everytime I hear that question, or when people ask whether Tom Glavine should be a first ballot Hall of Famer when he retires, I see red.
It's time to dispense with the niceties.
As a Twins fan, I don't know how people can talk about Curt Schilling without first talking about the disgrace the BBWWA heaps on itself because they haven't inducted Bert Blyleven & Jack Morris into the Hall of Fame already. It isn't that I think Tom Glavine & Curt Schilling aren't HoF-worthy. It's that I'm certain that Bert Blyleven & Jack Morris are worthy.
Let's examine things from a statistical perspective. Bert Blyleven struck out 3,701 hitters over a 22 year career, a figure that's still in the top 5 all time, even surpassing the great Walter Johnson's totals by almost 200. He threw 60 shutouts, which still is in the top 10 all-time. He threw 242 complete games, far outdistancing Mr. Glavine's or Mr. Schilling's statistics.
That's before we start talking about his curveball, which, when he was on, was simply unhittable. Other than Nolan Ryan's fastball, Bert's curveball was the dominant pitch of his era.
That's before talking about his 287 wins & his winning 2 World Championships. That's before talking about all the wins he would've gotten had he played on good teams all his career. Had he played on his era's equivalent of the Yankees or the Braves, you'd likely be talking about adding an additional 50 wins over his career.
Jack Morris is also Hall-worthy. Baseball writers like talking about Schilling being HoF-worthy because of his bloody sock game in the ALCS. There's no denying that that was one of the great games of postseason history. There's also no denying that it pales in comparison to Jack Morris's complete game, 130-pitch, 7-hit shutout masterpiece of the Braves in Game 7 of the 1991 World Series. I'll admit that I'm biased because I'm a Twins fan who watched every pitch of that game. That said, that isn't Mr. Morris's only qualification.
Mr. Morris won 3 World Series chanpionships. Each time, he was the ace of the staff. He also finished his career with 254 wins, nearly 70 games above .500.
As much as Mssrs. Blyleven & Morris deserve to induction into the Hall of Fame, they pale in comparison to Tony Oliva's credentials. Tony O is the only player in history to win the batting title his rookie season. To prove it wasn't a fluke, he demolished the so-called Sophomore jinx to repeat as AL batting champion.
Tony O was the greatest hitter I've ever watched. That's significant because I watched Rod Carew, Kirby Puckett & Joe Mauer on an almost daily basis. While those names don't match Ruth, Gehrig, Dimaggio & Mantle, they aren't chopped liver either.
To this day, Rod Carew will state without hesitation that Tony O was his hitting mentor. That alone should be Hall-worthy.
That's before talking about his winning 3 batting titles in his career. That's before talking about his winning a Gold Glove for defensive excellence.
The reason why Tony hasn't been inducted into Cooperstown is because, in August, 1968, he suffered a debilitating knee injury. He wasn't the same since. Nonetheless, he still rebounded to win another batting title. Had they invented arthroscopic surgery before that time, he probably would've put up spectacular numbers, possibly even gawdy, numbers.
As it was, Tony O still averaged 170 hits per full season, certainly an impressive figure.
It isn't a stretch to say that Tony Oliva was one of the top 25 hitters of all time, which certainly should qualify him for Cooperstown alone. Mix in his 3 batting titles & his Gold Glove & you've got solid Hall of Fame credentials.
It's time that the idiots in the BBWWA stopped asking whether Curt Schilling should be a first ballot Hall-of-Famer & finally correct the injustice they've visited upon Mssrs. Oliva, Blyleven & Morris.
Anything less is unacceptable.
Posted Monday, April 6, 2009 12:16 AM
Comment 1 by Mr. D at 06-Apr-09 11:24 AM
I agree with you -- Bert pitched for some really bad teams and that hurt his chances. 60 shutouts is the number that really pops out for me.
Morris loses support because his ERA is high, but there's little question that he was the best overall pitcher in the 1980s and one of the best big-game pitchers ever.
I'd also suggest that Jim Kaat and Tommy John both deserve more consideration than they've received.
No argument on Oliva, either.
If you haven't done so, read Bill James's book "The Politics of Glory," which is an elegant takedown of the Hall of Fame and the strange standards in play.
Comment 2 by Gary Gross at 06-Apr-09 01:33 PM
I haven't read Mr. James' book but I can't say that I'm surprised.
An argument I should've made with Tony O is the stats. The BBWWA voted Sandy Koufax into the HoF evenb though his career was cut short. They voted for him because of what he did before injuries ended his career.
How's that different than Tony Os career?
Comment 3 by walter hanson at 07-Apr-09 05:57 PM
Gary:
No offense to Tony O, but Koufax when healthy carried the Dodgers to the world series. 63 healthy Dodgers get to world series. 64 hurt dodgers have bad season. 65 despite the dodgers having no offense they win a world serier.
That's what reporters remembered. Note the Twins only had one world series which they lost during the streatch of 1964-1970 not exactly a dominating stretch like Koufax had.
Blyeven and Morris are hurt because the writers are too stupid to realize what a long and consistent career achieved. That's why Cy Young had so many wins.
Walter Hanson
Minneapolis, MN
Response 3.1 by Gary Gross at 08-Apr-09 06:25 AM
Note that I didn't say Tony O was better than Koufax. I merely stated that the BBWWA has made exceptions for induction when the numbers weren't gawdy.
And He Huffed And He Puffed...
Clarence Page's column is a good example of how willing the media is to give President OBama a free pass from reality. It's also a good illustration of how out of touch parts of the media are with what's important. Here's the opening paragraph of Page's column:
His wife may have attracted more camera attention, but the Group of 20 economic summit in London was President Barack Obama's show. He didn't get everything he wanted in his first presidential foray onto the world stage, but he passed his audition.To say that President Obama "didn't get everything he wanted" on this trip is understatement. Angela Merkel's criticizing President Obama's irresponsible budget was embarrassing. Couple that with the socialists in China criticizing his economic plans and a theme emerges. That theme is that President Obama is irresponsible and isn't likely to lead the global economy out of the dumps.
America's president is not called "leader of the free world" for nothing. Like it or not, the world looks to this country for leadership in the way old folks look to their kids or grandkids for help logging onto the Internet. The world's other leaders appreciate us and resent us at the same time. Sometimes they want our help and sometimes they want to slap us around.
Another thing is becoming obvious: these leaders will say anything to make him look good because they know they can push him around. It's the world's leaders' dream come true to find a president that they can lecture and push around. Their dreams just came true.
This stems from a generation of Democrats who worry that America isn't liked but isn't worried whether we're respected.
Nevertheless, Obama's comfort with give-and-take appears to have relieved world leaders.Oh really?
Ed Morrissey is spot on with this post :
As Diehl notes, Obama's "pliability" did not go unnoticed. Angela Merkel refused to consider Obama's plan of government stimulus spending (which in this case was a smart choice anyway). Nicolas Sarkozy insisted on getting his statist expansion, and got it. Very little occurred in terms of negotiations, but it seems Europe had no trouble with ultimatums.Why wouldn't these leaders appreciate Obama's administration? They push him a little and he caves. Thus far, what proof is there that President Obama will stand up for the United States' interests? There's abundant proof that he's willing to do exactly what European leaders want him to do.
This isn't "smart power." It's mindless, unilateral surrender. That seems to be Obama's specialty at home and abroad.
There's abundant proof that this is President Obama is pursuing Jimmy Carter's disastrous foreign policies. He's the leader of the free world in name only. The reality is that he's the 'man most likely to cave'. He's also the man most likely to let Europe do whatever it wants, even if what they want to do is push us around.
That isn't leadership. There's a word that better describes what it really is: appeasement.
That's before I start talking about the disastrous policy decision he made. Here's what Dick Morris said about his disaster:
Were this video coming from someone that the Obama administration deemed a radical right wing zealot, they could villify that person. It isn't. It's coming from one of President Clinton's most trusted advisers. It's impossible to brand Dick Morris a crazy right wing zealot.
In summation, the 'highlights' of President Obama's first international trip were his caving to other world leaders, his agreeing to turn United States' sovereignty over to the EU, and his being tongue-tied during a press conference.
If that's what's considered President Obama "passing his audition", then there's a ridiculously low standard for passing international auditions. What's more likely is that the press, Mr. Page included, has set a ridiculously low standard for passing international auditions.
Unfortunately, we've got 3 more years of the United States being the world's laughingstock. God help us all.
Posted Monday, April 6, 2009 7:17 AM
No comments.
President Obama's Budget
Clive Crook of the Financial Times has written today's must read article . In his article, he articulates why President Obama's budget is a scary thing:
While Barack Obama was in Europe last week, Congress was voting on his budget. Because of the administration's surpassing ambitions, and because of the colossal demands its budget will place on domestic and international capital markets, the outcome of this debate will matter more in the end for the US economy, and even for the world economy, than all of London's pleasant if ineffectual global summitry.Approximately a month ago, people criticized President Obama's budget projections. I ridiculed him for his liberal use of fuzzy math :
Both houses of Congress passed versions of the budget that are close to what Mr Obama proposed. Yet what comes next is still unclear. This will be decided in the House-Senate conference to reconcile the two versions, and in the tax and spending measures that follow. At this stage only one thing is sure: the permanent excess of spending over revenue in the long-term fiscal outlook.
A report I heard on TV last night said that the Obama administration is using the rosiest of rosy scenarios for FY2011-13. They're projecting GDP growth in 2011 at 5.5 percent and 6 percent annual growth in FY2012 and FY 2013. Those numbers aren't just optimistic. They're delirious. The highest growth rate for a quarter in the last 20 years came in 2003 when it hit 8.1 percent. The best years of the Clinton administration didn't average 5 percent.President Obama insists that FDR spent lots of money in his attempt to get us out of the Great Depression, then pulled his punches and didn't spend enough. That's wrongheaded thinking. Each time government takes money out of the economy, ecnonomic growth is limited.
President Obama's budget doesn't represent him taking a little bit of money out of the economy. President Obama's budget represents him taking one huge bite out of the private sector economy after another. I haven't seen visible proof that President Obama's budgets won't keep taking one huge bite out of the private sector economy after another.
One of the most expensive commitments in the budget is healthcare reform. Towards the full cost of this initiative, estimated at $1,200bn ($890bn, $810bn) or higher over 10 years, the budget merely calls for a 10-year "downpayment" of $600bn. So even that 3 per cent full employment deficit (4 per cent, according to the CBO) was a deliberate underestimate.In short, President Obama's budget is irresponsible in the extreme. Forget about whether we can afford it. Forget about whether the generations after that can afford it. The big question isn't whether the Obama administration-inflicted debt won't be a major drag on our economy for the next generation. The question is this: How big of a drag the Obama-inflicted deficits will be on the economy for the next generation.
And still it gets worse. Congress's new versions of the budget tweak here and there, paying lip service to the need for fiscal control, but taken together point in the direction you might expect, towards even bigger long-term deficits. Both chambers have agreed to scale back spending on future financial bail-outs, and to trim relief for the alternative minimum tax (a parallel tax code originally aimed at the very rich, which is starting to affect middle-class households). These are delusional economies. More will have to be spent on bail-outs before this crisis is over, and it is the closest thing to a political certainty that the ever-encroaching AMT will continue to be pushed back, at the cost of forgone revenue, year by year.
In short, whether it intends to or not, Congress is leaning towards making the long-term deficit even bigger. It is preparing to underwrite a large and permanent expansion of the government's spending obligations while failing to provide for a corresponding expansion of the tax base. A crucial question is therefore whether, and for how long, Mr Obama will continue to be bound by his pledge to raise income taxes "by not one cent" for almost all Americans.The crucial question isn't whether President Obama will keep his promise of not raising income taxes for middle class Americans. It's more about when he'll break that promise. It's obvious that President Obama can't get enough money from "soaking the rich" to get us even remotely close to balancing the budget. If President Obama wants to get us close to an acceptable debt-as-percentage-of-GDP level, he'll need to increase taxes on the middle class.
BTW, that's one of the reasons why Wall Street doesn't trust President Obama and why they haven't supported President Obama's economic plans.
That's why it's critical that conservatives join their voices with those of Paul Ryan, Mike Pence and other fiscal hawks. If we can impress on people that we've gotten the message and that we can be trusted to solve the banking crisis and right our economic ship, we'll win over the independents that we lost so badly the last two election cycles.
Winning lots of elections, starting in 2010, is the best way to stop President Obama's race to insolvency.
Posted Monday, April 6, 2009 8:48 AM
Comment 1 by JD at 07-Apr-09 12:33 AM
Very well stated and explained. Keynesianism coupled with rampant monetary policies plus doubling of the budget and pie-in-the-sky forecasts is disaster in my mind. I really don't see why the stock market has just not collapsed completely. Mr. Hope and Change is doing what everyone thought he'd do. Somehow, it will be blamed on the Republicans.
That's the Problem
John Harwood's NY Times article inadvertantly exposes the shortcomings in President Obama's budget. Here's what Mr. Harwood said that illustrates the absence of balance in President Obama's budget:
To each constituency, Mr. Obama has delivered a multilayered message that makes his challenge steeper. For average Americans, he has offered short-term relief from the pain of joblessness, home foreclosures and dwindling retirement savings. But he has also called for a long-term shift, away from familiar levels of consumption, and toward more rigorous emphases on education, savings and investments.Saying that President Obama is putting a "rigorous emphases on education, savings and investments" is code for saying that President Obama's emphasis is on spending trillions of dollars on the Democrats' political allies. It doesn't encourage small business hiring. It doesn't put us on a path to prosperity. Mostly, it just pays off then-candidate Obama's GOTV machine.
President Obama undoubtedly wants to keep spending at unprecedented and unsustainable rates. The stimulus just kickstarted President Obama's spending spree. It had nothing to do with getting the U.S. economy jumpstarted.
Here's another myth Mr. Harwood attempts to peddle:
For bankers, he has coupled support for bailouts with calls for tougher regulation and changes in the high-rolling habits of executive compensation. He aims to supplant a business culture of financial wizardry with one of entrepreneurial innovation.President Obama has put a gun to the banking industry's head and told healthy banks that they can't repay their TARP money unless they pass a rigged stress test. With the banking industry apprehensive about making loans, it'll be almost impossible to increase entrepreneurial activity.
Increasing taxes, whether they're income taxes or cap and trade taxes, will cause already cautious entrepreneurs to sit on the sidelines until President Obama changes policies. No amount of his talking will change that.
For China, his pledge to maintain fiscal responsibility, which would preserve the dollar as a haven for foreign cash, comes with a warning: do not count on "voracious" American consumerism to power your future growth.It's laughable that Mr. Harwood would highlight President Obama's "pledge to maintain fiscal responsibility", especially after going on the biggest spending spree in the history of mankind and after he's submitted budget that are fiscally irresponsible for the next decade.
Only an idiot would try spinning going on a spending spree of that magnitude as remotely similar to maintaining fiscal responsibility. People won't buy that schtick. They aren't as stupid as President Obama needs them to be.
The more President Obama and his media allies try spinning his policies, the more they'll reject President Obama's policies. People simply won't accept the Obama administration's insulting their intelligence.
Posted Monday, April 6, 2009 1:54 PM
No comments.
