Too Big to Fail, or Too Easy to Control?

Uncle Sam ShhhI was reading an interesting article this evening on the Washington Post website. I had actually diverted there from another site, I don’t remember which, that was discussing the article and the facts around it. We all are fairly fed up with the bailouts that we have seen. The Troubled Asset Relief Program (TARP) was the only one that I even remotely understood as possibly being needed. That isn’t to say I approved, because I am not sure that it was needed (I would be interested in what some of our more economically inclined folks think about whether it was needed or even good). But, the government unfortunately does not seem to be too interested in my opinion about what they should or should not be doing these days (or the opinion of any other regular citizen for that matter). The bottom line is that they passed the TARP bill and President Bush signed it on into law. They blamed Bush for deregulating and allowing the madness to happen, despite the fact that both parties (and especially you Barney Frank) were fully responsible for what happened.

But an interesting thing has happened along the way that I predicted would happen back when the TARP was passed: The power structure in the financial world has begun to become even more centralized. The Washington Post article offered up some very compelling information that shows that several of the financial institutions that we had negligently allowed to become “too big to fail”…. were getting bigger. After all, the problem was that “Bush had allowed deregulation” of lending practices, and as a result, financial institutions had become behemoths. As such, we were facing a crisis of massive proportions, banks this large falling on their face would destabilize the entire economy causing a great depression. Never one to waste a crisis, the government sprang into action to save us all from the very monsters they had, themselves, created. And TARP was passed, to the tune of $700 Billion. And the world was saved…..

Green Letter CartoonUntil the next crisis of course. TARP led to the economic spendulus bill, another $800 Billion in pet projects meant to save us from the “economic crisis” that still loomed. Of course the “Auto industry crisis” was next. Then we heard more on the “global warming crisis”, leading to the Cap and Trade Bill, which will end up costing taxpayers Billions more. Now we have the health care crisis. Isn’t it interesting that we have just had crisis after crisis after crisis after crisis? And conveniently the answer to all crisis situations is to spend a lot of taxpayer money, expand government dramatically, and centralize power with the 535 idiot children that live in the certified asylum we call the United States Capital Building. I can’t wait to see what the next crisis is that will strip away our rights and centralize power in DC. H1N1? Probably. But who knows, the federal government seems to have a propensity for finding (or in fact creating) any number of crisis situations that must be dealt with in an emergency fashion.

But I digress, the point of the article here is the big banks getting bigger. Because that is exactly what they are doing. Before I really address this allow me to say something as a sort of disclaimer. So long as the big banks get bigger through sound business principles and no interference from the government, I don’t have issue with it. I believe in the free market, which means companies should be able to get as big as they can handle. But that is not what is happening with this instance. No sir. The federal government has their hands all through this. And these companies are getting bigger through tax breaks, subsidies, bailouts, government protected bad practices, and favorable hands from those same 535 maniacs mentioned previously. This folks, is banks getting bigger despite their practices, despite their failures, and despite what is good for consumers or the economy in general.

Big Three BanksAnd how big are they getting? According to that Washington Post article: J.P. Morgan Chase, an amalgam of some of Wall Street’s most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued-and-owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.

Process that folks. Four banks in the United States, two of them at least partly government owned, issue 50% of the mortgages and 66% of the credit cards in this country. If the goal was to create some financial institutions that would be “too big-ger to fail”, I would have to say that the government has done a bang up job here. And the mergers that made these big banks bigger were the direct result of government interference. Federal hands pushed failing mortgage lenders and Wall Street firms to merge with bigger banks and handed out billions of American Tax dollars to make sure the deals went through. As the Post article noted: A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.

Isn’t that convenient. Now the question you have to ask is why would the federal government do something as silly as allowing banks that had gotten “too big to fail” to get even bigger… with government help? Surely since they “alerted” us to this crisis and then took our tax money and “solved it” for us, they are well aware that the banks getting too big would put us right back into the “crisis” that they just alleviated. Surely they don’t want that! Or do they?

Anti-Federalist-PapersJust follow me down the rabbit hole here for a moment while I play a little tune about the warnings that were given to us time and again by our founders and their opponents, in their writings, in their debates. The warnings from many people who are well aware of the best way to increase government control. Our founders knew well the danger of allowing the federal government to become too powerful. And that is why they purposefully wanted the states to maintain their sovereignty, to maintain control over everything not specifically mentioned in the Constitution.

In fact it could be argued that the biggest concern people had with the proposed Constitution was a fear that it would allow for a consolidation of power. In fact in the Anti-Federalist Papers, specifically the one written under the name of “Brutus”, this concern was laid out plainly. He said, “It might be here shewn, that the power in the federal legislative, to raise and support armies at pleasure, as well in peace as in war, and their controul over the militia, tend, not only to a consolidation of the government, but the destruction of liberty.” Clearly, Brutus felt that a consolidation of power in the federal government was a clear path to the destruction of liberty. And for the record, he was 100% correct. Therefore, the framers, worked quite hard to sell the idea and to create a document that would specifically empower the states to combat the threat of consolidation of power. Unfortunately, despite their best efforts, they failed.

Consolidation of power is a control mechanism. Look at everything the federal government has done in the last 150 years to take power away from the state and local governments and move it into federal hands, consolidating it where it could be controlled by a much smaller group of elites. The power of consolidation is why it is so difficult to delegate for the most intelligent folks. They sacrifice control.

Congress Money PuppetAnd if you want to “control” the economy it starts with the financial institutions. The Federal Reserve is controlled by the federal government (yes it is… don’t attempt to play the semantics game with me). Two of these four banks are already at least partially under government control, admittedly. The other two won’t admit so, but I have a feeling the federal government has a lot of say in what they do. The federal government has managed to maneuver a dramatic majority of the financial power in the United States into a few very big institutions. And while they don’t technically have control of them, they certainly have a massive amount of influence over them.

So the question that I am sure you are asking is, “If their ‘crisis’ was there, why didn’t they simply take control of the financial industry then under the claim of an ’emergency’ rather than playing this game?” And that is a good question. My answer would be that they knew there was no way they could simply do that and get away with it. The American people wouldn’t stand for it. Wouldn’t it be easier to simply do it in steps. Say… a series of well timed “crisis” moments that each time allowed a little more federal control over the financial industry. By “crisis” #3 or #4, they could have complete government control and the financial system would be state owned and run. How much more power over the good little citizens would that give them?

Whether those around us want to admit it or not, the federal government has, for years, been consolidating power in Washington DC. In every conceivable way possible. And I submit to you that this is no different. The Great Depression gave FDR tremendous leeway to enact much legislation and take over a vast amount of things. And here we sit with a President in the White House that is at least as progressive as FDR. Do you really think the game in Washington is played by fools? They know exactly what they are doing.

So I submit to you that the first thing we need to think about when discussing a better way forward for America is what moral core should be the defining factor. But shortly after that we need to discuss the fact that the consolidation of power that has been happening over the last 150 years is the primary means of control and power the federal government has garnered. We must figure out how to DE-centralize the United States. It is step one in removing the power from an out of control and overreaching federal government.

I look forward to everyone’s thoughts here. Is what is happening in the financial industry a precursor to ultimate federal control? Is that too far fetched a theory? Or is it a likely scenario? If so, how to we combat it?

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Comments

  1. I think you’ve hit it. USW. He who has the gold makes the rules. Almost a year ago, I mentioned to friends that this whole bailout business was really about destroying the American middle class, because we are in the way of the elites. We thwart their plans for us. Of course, I was dismissed as a kook. Another time, while the group was complaining about the financial mess the government is creating, I put forth that I believed the perps weren’t incompetent, but knew exactly what they were doing. Again, I heard the K-word. But, I’m incredibly stubborn and persist in my belief that that Obama and his Marxicrats know exactly what they’re doing. Its the Amercian people who are the nincompoops who refuse to see what is in front of them. Until every last citizen decides that the power grab is unacceptable, it will not be stpped. The sad/scary part part is that there are MILLIONS, if not tens of millions, who back Obama’s power grab 100%.

  2. To SK T,

    Off topic, but Glen Beck had something on Obama’s SS….

    http://www.foxnews.com/story/0,2933,543822,00.html

  3. Loooking forward to hearing from those who understand the economic issues better than I. I’ve been “bank free” for three years now. With the exception of the mortgage, I have no business at all with banks. It’s not as hard as folks would make it out to be, rather the opposite.

    I’ll be following today, but may not be able to post until I get home from work.

    Good Morning to All!

    G!

  4. My thoughts off the cuff:

    1. Since when do you (or anyone on this site) have a problem with companies growing as a result of tax breaks? Subsidies, I understand, but tax breaks? Isn’t that your favorite thing ever?

    2. There was quite the debate over the roll of the Federal government, as you well know. I think it is unfair to say that the Founders deliberately tried to preserve power for the states at the expense of a centralized government. I will do some more research today, but my impression (from 10th grade history) was more to the effect that they compromised because the states would never have signed on otherwise. Some wanted more / some less. They were, after all, a diverse group of intelligent people – and as we know, a diverse group of intelligent people can have very different ideas of the roll of the federal government.

    3. But Brutus is an honorable man…

    4. I think you pose conspiracy where none exists. Certainly things have worked well for some people’s goals, but that is not to say they were able to create the circumstances and then control the outcome. Rather, it seems to me, that they took the hand they were dealt and played it better than their colleagues.

    5. I wouldn’t say that large banks pose a hazard in and of themselves. Rather, unregulated large banks can be an issue. In the mad pursuit of profit, and don’t tell me that these companies have your best interest at heart, they will screw the customer, the economy and their own grandmother if it means an extra penny per share for the stockholders. By exercising control, the government can (largely) keep things in check to the benefit of us all.

    6. Whether N1H1 is used to sell Obama/Kenney-Care or not, it is only a very fringe element who is claiming that the government created the pandemic. I would say the News-attractive name “Swine Flu” created the media attention to which the public, and thus government, responded / over-reacted. Certainly some will attempt to use this reaction to their benefit whatever their goal. Some have argued that we should seal the borders (not that this could possibly help) because that is what they wanted to do in the first place. Some will undoubtedly try to argue that it proves why we need universal health care.

    • Oh, and I got a letter in the mail the other day telling me that the interest rate on my credit card is going up to the high 20’s percent (the actual number eludes me). Fortunately, I religiously avoid credit debt for just that reason, but consider that number for a minute. Calling it 25% for the sake of argument, the bank is unilaterally declaring that it’s going to charge 1/4 of all credit debt as interest? It sounds to me like usury, and something that should be regulated – but you might disagree.

      • PeterB in Indianapolis says:

        Mathius,

        Credit card interest ALREADY IS REGULATED. To claim otherwise would be a fantasy.

        The fact that YOU DO NOT AGREE with what the current regulations are does not mean that there are none.

        • Greatergoodcs says:

          They are regulated in absolute favor of lenders (including banks, etc. we just bailed out). That’s a pretty good deal if you’re on the money end.

          Take off “all” restrictions and you’re left with extortion.

          Then again, the bailout was extortion.

          Just thought I’d drop this one in for the hell of it.

          Free market … great idea if you’re the owner of the means of production. If not (and god forbid you live in a city), then you’re at the owner’s mercy (and yesterday someone here suggested the 8 million in NY starve).

          Consider this stirring the pot.

          • PeterB in Indianapolis says:

            Yes,

            They ARE regulated in nearly absolute favor of the industry, which is why I can say with complete certainty that we have nothing even vaguely resembling a free-market economy.

            Current government-run economy- great idea if you are the owner of the means of production (the mega-corporations or the government)… if not, then you are at the owner’s mercy.

            🙂

            • Greatergoodcs says:

              The gov’t is in the pocket of big money.

              not to worry, the revolution is a’comin’ …

              • Black Flag says:

                The first accurate thing you’ve said in a week …

                Government IS in the pocket of big money!

                The use of violence to obtain goods is the reason government exists. It is the best tool yet invented to steal.

              • PeterB in Indianapolis says:

                I have to disagree with GGcs and BF here.

                Government isn’t IN the pocket of big money….

                Government IS the pocket which the big money goes into.

              • PeterB in Indianapolis says:

                The revolution may perhaps be coming, but beware of the results. If YOUR revolution comes to pass, there will be no distinction whatsoever between the government and the big money, and that will not be any better than what you have now. In fact, it will be much worse.

          • Greatergoodcs, try to be a little more accurate.

            Greatergoodcs said
            August 27, 2009 at 12:48 pm

            Your theory may well be right. If so, what happens? Do you let (for instance) 8 million New Yorkers rot? Take away the subsidy and what happens? They flourish? 16 million deer show up to save them? I don’t understand your point.

            Life of Illusion said
            August 27, 2009 at 2:05 pm

            The mega-cities need to be weaned of subsidies, and allowed to evolve, or to die(that means people move to where they can survive). Detroit is an interesting case, high unemployment, one of the lowest school graduation rates in the country, yes, let it die.

            8 million New Yorkers (liberals),16 million deer show up?
            I think I will bet on the deer. hehehehe

            • I don’t mean to sound cold, (or maybe I do) but down here in GA we don’t consider Atlanta even as part of the state. So we don’t really care a rat’s ass if it does die. The state would be better off.

              • Esom, agree, the city would die, or evolve, the people would live, just somewhere else. The US has 263 mega-cities, be interesting to see what it would be like without them. Everyone on the coast moving to flyover country.

                Think I agree with D13 on this GG
                character.

              • Weeelllll. Id Atlanta dies I hope the worthless bastards in it go the other direction from me. We neither want not need them.

              • That’s funny.. Being from LA, we don’t consider San Fran as part of the state 🙂

              • Even funnier, I live in San Jose and don’t consider San Fran anything other than a great place to freak watch 😛

      • Didn’t say there weren’t any. I was actually advocating for stronger regulations.

        • PeterB in Indianapolis says:

          Ok, that clears it up a bit.

          One other possibility that you should consider is that with 4 large banks controlling over 66% of the credit card market and with the federal government crafting regulations which are highly favorable to these 4 entities, it is POSSIBLE that there is insufficient free competition to force credit card rates down.

          Of course, this is only a possibility 🙂

      • On this topic, I will agree that it is usury but, then again, why would you, or anyone care, about the credit card company? Personally, I do not care about it for I own NO credit cards. None. I refuse to use credit cards and that includes cars and mortgages. I do suffer from the fact that my credit history is nil…therefore, I have no number rating….it is 000 with an asterisk that eludes to no credit history. If I want something, I save until the cash is there.

        It would seem to me that people will begin to practice better cash management if the interest rates soared to 100%. Therefore, the free market would respond because people would not take on debt and credit card companies will have to lower rates. If they don’t, they are out of business. I will also refute the argument that personal responsibility should not be paramount here. It should. People DO NOT have to live off credit…and I am talking about credit cards or accounts. I am not talking about utilities, etc.

        In my current business, I take only cash or checks. I will not take credit cards because of the charges to me. My usual transaction runs between $85 and $130. I am charged a total of 3.8% to 7% to use cards….I then have to raise my prices to cover the additional charges and that becomes exponential. it is not worth it. My profits increased when I did away with credit cards. If I desire to extend credit, then I make that my personal choice, and I will bill a customer. I will take my own risk.

        Long answer to your post but it is usury but my answer is…why live on credit and it becomes a personal issue and should not involve the taxpayer.

        • Greatergoodcs says:

          The “plant” is back (talk about paranoia), but only to bid adieu … have a good weekend … life … afterlife, etc.

          • Did someone here refer to you as vegetable matter? Come back anytime GG! You sound from your posts to me as a greatly misguided liberal, 🙂 but also a pretty smart guy.

            • Esom…in fairness to GG……I digressed from my normally “do not attack position” to a probe position on yesterdays blog. I am responsible for that “plant” statement and accept full responsibility for it. I did not impugn his intelligence…I encouraged a couple of persons to ignore him and referred to him/her as a plant from the left to create confusion on this blog site. So, the fault is mine and I do not wish ill will but his credibility with me has died and that is my choice.

              However, I was wrong in that attack on him/her and allowed an uninformed, perhaps very young, person with their right to their ideas, get to me. It will not happen again and I admit my weakness in allowing emotion get the best of me but sometimes when I see positions such as the ones he/she espouse, I flash back to my experiences and deride those who have not had those experiences. I am getting better at it but not perfect. Experience and reality is the best teacher and he/she has not had that yet.

              So, in that light, I am the one that used the term plant.

              • Greatergoodcs says:

                He … is 53 years old … worked 2 jobs most of HIS life … was also a criminal for a while there (18 years/speaking of extortion) … was a devout Democrat until he returned to the legitimate working world full time and didn’t like what he saw (a lot of people getting away with “milking” their work at the expense of others {like himself} … no accountability for anything, etc.), saw the milkers were disproportionately Democrats and could no longer identify with their party … against his social conscience voted for Bush twice … has regretted those votes ever since (even though he wouldn’t have voted for either Gore or Kerry); now is a confirmed independent who would vote for any liberal party that stood an iota of a chance to win (Nader being the most obvious choice) but prefers socialism. Understands that Gov’t is easily corrupted by accepts the premise that it takes big money to do so and it has been big money in charge (of the Gov’t) since day 1. Doesn’t accept any postulate that starts with no government; doesn’t believe it is possible. Thinks man left alone (state of nature) would do fine … but as soon as man #2 arrives on the scene, there is a quest for dominance (why we need Gov’t of some form).

                Doesn’t think socialism is the cure for what ills all of us but accepts it as the best choice given what’s out there.

                Knows his position is polar to those in this site but is bored waiting to get laid off for the 2nd time this administration so rather than play video games HE comes here for the discourse (when it’s reasonable—some of it his core beliefs preclude him from engaging in).

                Paying attention BF … “preclude him from engaging”).

              • Black Flag says:

                Reply below

              • Well that was sure as hell a mouthfull.

                A Socialist?

                Now it all becomes clear.

              • Noted…..HE it is and I am surprised that 53 years of life’s experience leans towards Socialist but, if that is your choice, so be it. The age comment was that the more Socialist bent is usually the younger crowd. however, your beliefs and intent are clear and that is your choice. We disagree but that is also ok.

                Hope you and yours are doing well.

              • Greatergoodcs says:

                Thanks, brother. Back at you. You gusy are all right by me!

          • PeterB in Indianapolis says:

            Greatergoodcs,

            I hope that you have a good weekend too 🙂

          • Hope you’re not leaving me here all alone.. I need allies in this cave..

            • Greatergoodcs says:

              Not to worry, brother. I’m out driving left wing blogs crazy today. So-called “liberal democrats” make me just as crazy as wingnuts. They choose to fingerpoint at whackjobs on the right rather than hold Obama (and his party) accountable for what he’s NOT DOING. I was no fan of Regan, but I’ll give him this much: “Do Nothing Democrats” couldn’t be a more accurate phrase.

              I’m sure you can figure out Nader is my guy (GG, with athletic aplomb, ducks the rocks being hurled his way).

              Peace.

        • PeterB in Indianapolis says:

          D13,

          My personal wish is that all people who currently had credit card debt of > $5000 would all simply simultaneously declare bankruptcy.

          It wouldn’t be a permanent solution to the problem, but it would scare the hell out of the banks.

          Mathius,

          Please note that no matter whether it is a Republican or a Democrat that controls the White House, it is NEVER the consumer that gets bailed out in any meaningful way. It is ALWAYS the banks that get bailed out.

          If 50 million people threatened to simultaneously declare bankruptcy, the federal government WOULD NOT say, “ok we will forgive your debt and THEN give that money to the banks”. What they WOULD do is say, “Ok, go ahead and go bankrupt, and THEN we will give a bunch of money to the banks to get your bad credit off of their books.”

          • Too true. But that goes to something I have said before. Pols will give money to companies, because companies give larger donations to the pols than We The People do.

            You know, if I were more cynical man, I would see this as self-serving. I’m sure it’s just a coincidence though 😉

      • The credit card rates are going up because so many people are using credit to try and save their homes. At least thats what we did (didn’t work but we held off foreclosure a few months so the short sale could get approved). I think the banks know this and are taking advantage of the situation. Not only did we get a notice about raising the rates BUT they also decided to change the due date for payment. Of course we received this notice 2 days AFTER the payment was due so they could also tack on an exhorbitant late fee too.

    • I find it odd that you would defend making the big banks bigger, giving them more power… Even with the government pulling the strings I would have thought you would want to take their money with taxes instead of giving them breaks. Isn’t that your favorite thing ever?

      • I have a pretty clear-eyed understanding of the financial industry given my place within it. That said, I do not specifically want large banks, all I said above is that large banks in and of themselves, are not a problem as long as they are well regulated. A Mack truck is very large – but we have rules to keep them from behaving erratically. If we didn’t, it would be a menace to other drivers.

        • PeterB in Indianapolis says:

          So what you are saying is that even though the Democrats hold the office of the President, a supermajority in the Senate, and a comfortable majority in the house, the regulations which they have recently crafted which were in the TARP bill and other bills are not the regulations which you would like to see put in place? Is that reasonably accurate?

        • Somewhat. I am not bound by the need to raise unholy amounts of money in order to retain my job. So I get to wish for regulations that do what they’re supposed to do. The restriction on raising rates, as I recall, was set to kick in after a set period of time – thus giving banks the time necessary to raise rates in advance. BRILLIANT!

          But no, this is usurious. It’s fine if you’re going to run over for a month (I suppose), but what if you have debt? They raise the rates so high you can’t pay down the principle? Then what? You pay huge amounts of interest because no one steps in and says that’s unacceptable? Yes, yes, I know, you’ll say “well then they shouldn’t have gone into debt in the first place,” and I agree, but that’s irrelevant at this stage – they are in debt, so should the banks be able to screw them this much, or should they be regulated to protect The People?

          • PeterB in Indianapolis says:

            My argument is that the government already heavily regulates the financial industry. You wish it to regulate the industry in a way that favors the people, but it demonstrably regulates the industry in ways which favor the industry.

            You cannot blame that on a “lack of regulation”. You can only blame that on the government not enacting regulation that actually does what you wish it to do.

          • Yes, Mathius, it was a stroke of brilliance…a compromise that says…ok…we will warn the masses before we get them. This, in conjunction with the fact, that more debt will be retained…can’t pay it off…hence more government control and the brainwashing tactic that because “we” got into debt, government is the only way out…so let us make it bigger…more regulations…more compromises….to cement the fact that the masses cannot live with out government interference. What a circle.

            But, I recognize that you have a good point.

            • I especially like the “WE” part.

              “WE” got into debt.

              These companies are fixing to fall on their fiancial asses and “WE” have to bail them out because their too big to fail.

              “WE” are all responsible for this financial mess the Nation is in.

              Hey! Obama! You got a mouse in your pocket??

              • Oh don’t let me forget. Bush must’ve had a mouse in his pocket too.

              • Haven’t you heard? Everything is Bush’s fault.

                Taxes? Bush’s fault
                War? Bush’s fault
                Disease? Bush’s fault
                Famine? Bush’s fault
                N1H1? Bush’s fault
                Halitosis? Bush’s fault
                Your dog died? Bush’s fault

                That’s right. George W. Bush is the reason your beloved pooch is dead.

              • you forgot hurricanes

              • Or, if you prefer, it can be all Clinton’s* fault.

                *Either Clinton.. or both, whatever

            • D13…do I have this right that if you do not use the credit card the interest stays the same while you pay it off. If I had debt on a card I would make payments ad not charge anything new.

        • Nor, by the way, am I bound by the need to make the compromises necessary to pass my imaginary regulations.

          Nor, for that matter, am I a financial sector regulation expert, so I imagine it is possible (highly likely) that I am wrong or inaccurate (though they’re an equally high probability that you, too, are wrong and/or inaccurate).

          • PeterB in Indianapolis says:

            Mathius,

            There is never an equal probability that 2 distinctly different premises are both wrong, unless they are both equally poorly constructed premises.

          • Alright, then you’re more likely to be wrong than me, but we’re both likely to be wrong to some extent.

      • A well regulated financial sector, being necessary to the security of a free State, the right of the banks to keep and and make profits, shall be infringed.

        My apologies all around – I just couldn’t help myself..

        • PeterB in Indianapolis says:

          Mathius,

          The key to your proposition is the term “well”. Well-regulated would mean that the regulations were “good” and in your examples this would mean that the regulations favored the consumer over the banking industry.

          You assert that mega-corporations are the result of unbridled and unregulated free-market capitalism and therefore government regulation can cure the problem.

          I assert that mega-corporations are the result of unbridled and unregulated government, and therefore government regulation caused the problem and has no interest in fixing it in the way you wish it to be fixed.

        • Yes, “well” being the key. I agree. I think we just disagree on what that means. I think the industry is “poorly” regulated. That doesn’t necessarily mean that there isn’t much, just that it’s not properly done. If that makes sense.

          • PeterB in Indianapolis says:

            Mathius,

            I will put it to you this way. If I agreed that regulation was the answer, then I would completely agree with what you just said.

    • When talking about what the founding fathers really inteneded I feel it is important to include “The Articles of Confederation” which served as our first constitution. Even though the source is open, I just looked at the wikipedia entry and I feel it gives a just amount of information on what the Articles are and why people felt that the Constitution was needed.

      • I’ll take a look, but I should add that the Founder’s opinions on modern finance is irrelevant. They could never have imagined the modern financial industry – stock, bonds, CDX’s, CDS’s, MBS’s, futures, convertibles, CFD’s – these things would have meant nothing to them. Likewise, they could never have imagined the interconnected environment within which they operate. With respect to their (substantial) foresight, it is like asking what Genghis Khan would have thought about the auto industry.

        • PeterB in Indianapolis says:

          Mathius,

          I would submit that the financial industry became as complex as you make it sound precisely because too many people thought that the Founder’s opinions were irrelevant.

        • The financial sector became as complex as I make it sound (and a great deal more so) because people found new and innovative ways to make money. I could go into the nuances of some of these instruments with you if you like, but they each have their advantages and disadvantages (swaps, in particular are great for avoiding taxes, but a royal pain operationally). Suffice it to say, the Founding Father’s had nothing to do with it. Some guy said “hey, this sounds bright” and poof, a new asset class was born. Then, the government regulated it well and/or sufficiently or it implodes causing massive damage. Every. Time. MSB’s being the most blatant, recent, and extreme example.

          • For clarification, MSB’s are Mortgage Backed Securities.. not sure if that was apparent or not..

    • Mathius,

      My answers off the cuff:

      1. Since when do you (or anyone on this site) have a problem with companies growing as a result of tax breaks? Subsidies, I understand, but tax breaks? Isn’t that your favorite thing ever?

      I will grant you that mistake simply because you are newer to the site.Be careful not to throw me in with the Republican point of view. You will find there are many practices and policies on the right that I do not subscribe to. For example, I am a 100% in support of gay rights, I believe a woman has control over her own body and actions despite what I may think about what she is doing, and I don’t support government interference in the market ever. Not even when I think it will work in the short term. Therefore, and I am speaking for me only, no it isn’t my favorite thing ever.

      2. There was quite the debate over the roll of the Federal government, as you well know. I think it is unfair to say that the Founders deliberately tried to preserve power for the states at the expense of a centralized government. I will do some more research today, but my impression (from 10th grade history) was more to the effect that they compromised because the states would never have signed on otherwise. Some wanted more / some less. They were, after all, a diverse group of intelligent people – and as we know, a diverse group of intelligent people can have very different ideas of the roll of the federal government.

      Surely they had diverse thoughts and rigorous debate. But there was a widespread notion that centralization of power was a bad thing. There is a lot out there written, so I would suggest that you do some research. There are several here who can point you in the right direction.

      3. But Brutus is an honorable man…

      I did not claim otherwise.

      4. I think you pose conspiracy where none exists. Certainly things have worked well for some people’s goals, but that is not to say they were able to create the circumstances and then control the outcome. Rather, it seems to me, that they took the hand they were dealt and played it better than their colleagues.

      I don’t claim conspiracy. But I don’t rule it out either. I would say, however, that we would be making a mistake if we say the “best and the brightest” among us, who inevitably are called in to help make decisions, sure do have no clue what is going on given the results they get. Or…. this is the exact result they wanted to get. Every person will have to decide on their own which is most likely.

      5. I wouldn’t say that large banks pose a hazard in and of themselves. Rather, unregulated large banks can be an issue. In the mad pursuit of profit, and don’t tell me that these companies have your best interest at heart, they will screw the customer, the economy and their own grandmother if it means an extra penny per share for the stockholders. By exercising control, the government can (largely) keep things in check to the benefit of us all.

      Insert government into your sentence in any place that you mention big banks. Such as this:

      I wouldn’t say that big governments pose a hazard in and of themselves. Rather, big government can be an issue. In the mad pursuit of power and control, and don’t tell me that these politicians have your best interest at heart, they will screw the citizen, the economy and their own grandmother if it means an extra ounce of power for the elitists.

      The fact that a few words changing in your sentences can create such an accurate portrayal should bother you a bit. It certainly points to the fact that government is no better than big banks, and is no more interested in a solution than the big banks are.

      6. Whether N1H1 is used to sell Obama/Kenney-Care or not, it is only a very fringe element who is claiming that the government created the pandemic. I would say the News-attractive name “Swine Flu” created the media attention to which the public, and thus government, responded / over-reacted. Certainly some will attempt to use this reaction to their benefit whatever their goal. Some have argued that we should seal the borders (not that this could possibly help) because that is what they wanted to do in the first place. Some will undoubtedly try to argue that it proves why we need universal health care.

      I didn’t say that government created Swine Flu. In fact I don’t even remotely believe that is true. What I do believe that it could be the catalyst for the next big crisis that causes a further erosion of my liberty.

      USW

    • 1. Since when do you (or anyone on this site) have a problem with companies growing as a result of tax breaks? Subsidies, I understand, but tax breaks? Isn’t that your favorite thing ever?
      Define the tax break you speak of. If its that handout thing that was to those who didn’t pay income tax, give your head a shake and pickup any 100 level accounting text before responding. If its something actually worthwhile speak up. I’ve not seen a report of such and I would think CNN would be blasting such every 15 minutes in their rotation.
      2. There was quite the debate over the roll of the Federal government, as you well know. I think it is unfair to say that the Founders deliberately tried to preserve power for the states at the expense of a centralized government. I will do some more research today, but my impression (from 10th grade history) was more to the effect that they compromised because the states would never have signed on otherwise. Some wanted more / some less. They were, after all, a diverse group of intelligent people – and as we know, a diverse group of intelligent people can have very different ideas of the roll of the federal government.
      Not at its expense but at all. They were obviously thinking of THE INDIVIDUAL STATES RETAINING THEIR INDEPENDENCE. Some wanted less control of their own affairs? Why would any thinking “let another run the show, we’ll just watch” have wanted to break free of the royal apron strings in the first place.
      3. But Brutus is an honorable man…
      Sure.
      4. I think you pose conspiracy where none exists. Certainly things have worked well for some people’s goals, but that is not to say they were able to create the circumstances and then control the outcome. Rather, it seems to me, that they took the hand they were dealt and played it better than their colleagues.
      I blame Bush for treason against conservatism. He was more than able himself to pull an Obama and just throw away consideration for all the Americans who didn’t vote for him but failed to do so. Some people just don’t get the presidency is there to afford one man the ability to pay back his debts no matter their scale or to whom the debt is owed. Good thing the current incarnation of POTUS didn’t borrow from foreigners or radical nutbags…
      5. I wouldn’t say that large banks pose a hazard in and of themselves. Rather, unregulated large banks can be an issue. In the mad pursuit of profit, and don’t tell me that these companies have your best interest at heart, they will screw the customer, the economy and their own grandmother if it means an extra penny per share for the stockholders. By exercising control, the government can (largely) keep things in check to the benefit of us all.
      Every business that issues stocks is beholding to the stock holder. You’d rather they owed the unions instead and screwed the stock or bond holder? If that’s now the business model of choice in America, who is going to invest in all these dead end companies? Didn’t you claim to work in finance? How is it you are so unaware of the principals of wealth creation and the corporate entity? As for government regulation, it was on the table many times and I’ve posted such as have others here going back to 1989 for just Barney Frank alone. Hell, Carter’s term was a hotbed of “give your tween a gold card” economics and a whole other story itself.
      6. Whether N1H1 is used to sell Obama/Kenney-Care or not, it is only a very fringe element who is claiming that the government created the pandemic. I would say the News-attractive name “Swine Flu” created the media attention to which the public, and thus government, responded / over-reacted. Certainly some will attempt to use this reaction to their benefit whatever their goal. Some have argued that we should seal the borders (not that this could possibly help) because that is what they wanted to do in the first place. Some will undoubtedly try to argue that it proves why we need universal health care.
      I myself posted they’d use it as the Chinese had JUST went public with warnings over their own flu season predictions as it indeed does have an impact on productivity with working populations in such close proximity to each other regarding primary dwellings and mass transit. That was well before anyone else was speaking of such and I did say it was going to be part of the new pitch for Uni-health. As for some theorizing the government creating it, I’d like to read such. I’ve seen the “white man created aids to kill off gays and blacks” fantasy and even Lewis Farrakhan’s twist on that one which I should have printed off here somewhere as it indeed was that funny but not the H1N1 version. Also I’ll add it here as I’ve been keeping up on the situation through Medscape and Medline that there are already mutations being cataloged some of which already may have put it beyond the current vaccinations. Here in Saskatchewan we’ve been sending in birds that have died of “no apparent causes” to U of S for pathogen identification and codification into the system since Avian Flu and West Nile-like Virus became identified in local populations both avian and human. Agronomics is an enormous deal here and many American agencies make use of our facilities which are cutting edge and incredible staffing of those facilities. The RCMP DNA lab at Depot in Regina, for a long time, was used by more agencies of the American government than our own.

      Uni-health’s only viable pitch in matters of disease control and prevention is in making the permanent and open connection from the patients at ground level to the CDC and her sister organizations world wide at the top of the pyramid. Completing that and allowing them, the CDC and her sisters abroad, unrestricted access to all matters medical and affording them timely sample collection without working through the current system of passive acquisition (through only reported anomalous cases) is bringing the benefits of cloud programming to disease discovery, identification and control. Now that’s a worth while endeavor if there ever was one.

  5. I have never understood the bailout concept. Since when do we not let business fail? I have always believed it is a slope we dont want to be on. Because where does it stop? If you give to one company, how can you say no to another? Where do you draw the line. Yes I believe that Washington has always used a “Crisis” to get away with stuff that the people wouldnt normal put up with. This goes across the board. Now not only does the Federal Government have great pressure over the banks, but the bigger banks are buying out the smaller ones. Crazy and Scary. I have done away with all my credit cards. They are going to squeeze the middle class to death with all the rulling they have.

    • Ellen,

      I agree completely. But I do have an answer for you. You stated:

      I have always believed it is a slope we dont want to be on. Because where does it stop? If you give to one company, how can you say no to another? Where do you draw the line.

      In Washington you draw the line at who is lining your pockets or your campaign coffers and who is not. Plain and simple.

      Hope you are having a great day!

      USW

      • Greatergoodcs says:

        USW: In Washington you draw the line at who is lining your pockets or your campaign coffers and who is not. Plain and simple.

        BINGO.

      • USW I am having a great day- same back to you!

        Yes Washington is lining their pockets and helping those people along the way. Sad but true. Plus those who refuse their help or will not play their game suffer in return.

  6. PeterB in Indianapolis says:

    Back in the mid-1970s (before I was old enough to have any real concept of “economics”) my father had a friend named Ray (no, his last name was not Hawkins :)) who was largely dismissed as a right-wingnut. He was perhaps one of the earliest examples of the sub-species.

    His theory was that in 1913 the Federal Reserve was created so that the large banks of the world could eventually take over the government of the United States. The Federal Reserve was given the authority to set monitary policy without the requirement of government approval of their actions, and the Federal Reserve was given the authority to print money (a power which was Constitutionally reserved for the Treasury) and then loan this money to the government and private banking institutions. The Federal Reserve can (and does) charge interest on all loans it makes to both the government and financial institutions. Gradually, the federal reserve would put in place policies which would favor the largest worldwide conglomerate banks (many of which were controlled by friends, family members, and cronies of members of the Federal Reserve Board) and eventually these world-wide conglomerates would crush all local and State banks and eliminate all competition. Once this was accomplished, the world-wide banking conglomerates would set about their plans to control the government through financial means.

    Back in the mid-1970s, this guy was dismissed as a complete crackpot. I suspect that a lot of people would dismiss him as a complete crackpot today as well. However, if we look at the actual history of the banking industry and the government from 1975 to now (or even more importantly from 1913 to now), we need to ask ourselves, “Does what we have seen in the last 96 years of the history of banking and government contradict what he was saying?”

    • Does that tie into the Bildeburg (sp?) Group? There’s a video on YouTube about this group and the takeover of the Federal Reserve. http://www.youtube.com/watch?v=eAaQNACwaLw

      • PeterB in Indianapolis says:

        I suppose it could, there are quite a number of conspiracy theories out there regarding the Federal Reserve, but as Black Flag points out once in a while, perhaps many of us are too quick to discount conspiracy theories as “crazy”.

        Back in the 1970s, the people espousing the Federal Reserve Conspiracy Theory would frequently bring up the names “Rothschild and Rockefeller”.

        Oh, and if anyone actually thinks that these two names are synonymous with unbridled and unrestricted free-market capitalism, I suggest you visit http://www.rockfund.org to see how well the Rockefeller Foundation ideals align with free market capitalism (hint, they DON’T).

        Also, note that the Rockefeller Foundation was chartered in 1913… which is (of course) a mere coincidence.

        🙂

  7. USW…..I know I will be in the minority on this. But I am a great believer in personal responsibility. To me, you cannot be too big to fail. I know the arguments of economic impact and I know the arguments about loss of jobs, pensions, etc. This last debacle of GM is a great example. It should have failed and pensions should have been lost and fortunes devastated. I know that is a hard core look at things but would that not spur more scrutiny and personal responsibility to bargain better with unions and employees and make financial decisions if everyone was held accountable and not all of us? Do you not see the folly of usurping the bankruptcy laws to bypass secured creditors in favor of the union and its pensions? Why would I want to own stock in any large company given this track record? Why would I want to by a GM car or invest in GM ( I don’t anyway but will not now) because there is still no fail safe and this administration is no different than the rest of them because they are in pockets as well and deeper than the Bush administration. The Obama administration makes Bush look like a piker, now. There is more corruption now than there ever has been….including NIXON and CARTER. I thought I would never say that. These Czars are offering no oversight? Even the most illiterate moron can see that this is a government power grab and that these CZARS have no responsibility to the citizens or Congress (not that it matters with this current Congress). Bigger government is a pariah.

    So, you cannot be too big to fail. Let them fail and the water seek its own level. Perhaps that will spur some personal initiative and personal responsibility and take this government protect me attitude away.

    • Ahhhh…the forgetfulness of proof reading….let me explain the sentence: “make financial decisions if everyone was held accountable and not all of us>” Geez…that should have read “make financial decisions if everyone involved was held accountable and not all of us…especially the ones not involved.”

    • PeterB in Indianapolis says:

      D13,

      I agree with what you say, but the reality of the situation is we were never given the option to let them fail. If the best option was to let them fail and suffer the consequences, yet we were never given that option, we need to examine what precisely happened that made it so that option was never available.

      • Yes, I know. That option was never presented and, of course, they will never be. the government has to our thinking for us. (That was sarcasm, for those whom do not recognize it).

        Good morning to you, Peter. Hope your weekend is shaping up.

        • PeterB in Indianapolis says:

          D13,

          It is supposed to be rainy here tomorrow and unseasonably cool on Sunday (a HIGH temperature of 68 in Indianapolis in August???).

          As a result, I plan to spend the majority of my weekend indoors relaxing with my wife and kids, which suits me just fine 🙂

      • Peter, we don’t need to “examine” what happened. 🙂

        What happened is that our Government and our President(s) (first Bush, then Obama) told us that these businesses were too big to fail and to trust them to do the right thing with them. Then they proceeded over our weak (stunned, uninformed) objections and proceeded to take the money and save them and in the process take them over.

      • Wha’ hoppen to my pos’?

      • Wha’ hoppen to my pos’?

      • D13

        I agree that personal accountability is gone- I learned the hard way on this one. I went out in my late teens and spent on the credit cards that someone would give me. By 23 I had a rude wake up call on what I owed. So I spent a better of 3yrs paying back every dime. I dont own credit cards now, and pay for everything in cash. Since our gaovernement has chosen for us to bail everyone out- alot of people in America ask why should they pay their bills? But people were not complaining when they were living it up.
        Hope you have a great weekend!

    • I don’t think you will actually be in the minority here. I wholeheartedly agree that they should fail if there business practices lead to that conclusion. If the service they were offering is of value, there will be another (or many others) to fill the void. It’s failures should be used as a lesson to others filling the void.

      For the individiuals that would suffer for the wayward business practices, they would have my sympathy, and help if I were able to offer it. Life is full of wins and losses…your decisions will tip the scale one way or the other.

  8. PeterB in Indianapolis says:

    I know we are not supposed to side-track since this is not open-mic night, but I have not provided an update for a while:

    http://www.solarcycle24.com

    Days since last “official” sunspot = 48

    • Peter,

      I think JAC posted one on undersea volcano’s raising the sea temp. I have been following the posts, but have not commented. Those new to the site might want to give this a look. If you don’t know what no sunspots means, just ask.

      “Average temperatures of waters at the oceans’ surface in July were the highest ever recorded, the National Oceanic and Atmospheric Administration said. The agency said the average sea surface temperature was 1.06 degrees higher than the 20th-century average of 61.5 degrees.”

      http://www.nytimes.com/2009/08/15/science/earth/15brfs-OCEANTEMPERA_BRF.html?_r=1

      • Black Flag says:

        Oops, you’re a bit behind in the news, LOI.

        It has now been shown that the anomaly is due to…wait for it….

        MIS-MEASUREMENT!!

        Spencer: NOAA’s official sea surface temperature product ERSST has spurious warming error, July 2009 SST likely not a record after all.

        • Thanks for the update. Have they done a study on how many studies on AGW they have had false data on?

          • Black Flag says:

            The current mania makes necessary ‘the rush to publish’ without the necessary (and time consuming) vetting that most other science does.

            It is becoming an epidemic of errors in Climate Science!

        • Not exactly scientific, but I’m in northern Wisconsin this weekend for a late summer get-away and the high tomorrow is supposed to be 50 and the low a whopping 32! What the hell??? So much for water sports, and even golf will be a challenge with all the layers of clothes!

  9. Good morning all: Just reading for now, need more coffee before I will be able to write anything significant.

  10. Some of my responses are missing.. not sure what’s going on…

  11. Nope…on this point, I have to agree with you.

    • Interesting….not appearing where I posted…..must be another conspiracy (attempt at humor)..

  12. Mike M. Houston Texas says:

    Some very good points here. However, in working in large behemouth I can certainly tell you that letting it fail would not impact those, I believe the spirt of the argument wants to impact. Let the high paid execs take their lumps and let it fail. This would of course only hurt the 100,000 middle class workers that suddenly have no income. The 100 or so execs with million dollar bank accounts would simply ride off into the sunset on the nearest beach. I am no advocate of big government however, I do see the need for a method in which employees have equal control of a large behemouth so they are at least in on the decisions that allow it to fail in the first place. Case in point. Everyone takes a pay cut. The CEO cuts his the most. His 300,000 is cut 20% so he now only makes 240,000 ahh but here is the smoke behind the mirror. Last year his bonus was 43 mill. So who is really feeling the pain here?

    The option should have been for the US population to come up with the money on there own and then allow for a new vote on management. However this will never happen as the govt grabbed the proxy votes.

    I am glad some were allowed to continue with life and pay their bills for it was not them that got GM into the mess but they are the ones that would pay most.

    The real problem was govt regulation in the first place. How can anyone make a car with 9,000 restrictions on how it is made and then be overly taxed on the product that comes out the backend. Get govt out of the way and then let them fail or prosper.

    • PeterB in Indianapolis says:

      Mike M,

      The last paragraph is the best one.

      The workers will always be temporarily hurt if a company fails, but as Terry said above, if the product or service they were producing was of value, then another company will spring up to provide that product or service, as well as provide employment to the workers who lost their jobs.

      The danger with government involvement is that the government has the ability to prolong the life of a company beyond its usefulness. When this happens and the company eventually fails anyway, the workers that lose their jobs will need to be retrained to do something else.

    • Don’t forget, with the whole Chrysler deal, the bondholders got ripped off by judges who BROKE THE LAW by not giving them 100% of their investments. Instead, the unions got even more than they did! So while the middle class would have taken a hit more than the CEOs, they still took a hit in the form of government intervention on behalf of the unions. Sounds like a lose lose to me.

    • A lot of thought is given to the middle class workers at these banks and the fact that they would have lost their jobs. I think the part that is ignored is part of those workers are partly responsible for the companies troubles. When a person works for a company they are selling their labor to that company. They are free at any time to seek different employment if the company is practicing questionable buisness (i.e. dealing with sub-prime morgages). It is each workers responsiblity to know what the company that they work for is getting into. Otherwise we can not claim that people should be responsible for themselves. I have a friend that was offered a very lucrative(sp?) job selling sub prime morgages just before the collapse but realized it was a bad business move. His choices were take a huge increase in pay and participate in bad business or stay were he was at. He made the choice to avoid the bad business because he realized the flaws involved. Where a person works and what he does is his responsability.

      • PeterB in Indianapolis says:

        This is an excellent point Seed.

        A worker is (at least in theory) not a slave. If a worker does not like what their company is doing, the worker is theoretically free to seek employment eslewhere.

      • Black Flag says:

        One can become very wealthy being a criminal.

        It is a choice of moral or immoral means.

        Politicians believe immoral means can create moral consequences.

        Your friend was wise to know that is impossible.

  13. Black Flag says:

    “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” – Franklin D. Roosevelt

    • PeterB in Indianapolis says:

      The place where the failure of this statement occurs most often is that government refuses to admit failure and try something else.

  14. Black Flag says:

    So to understand what is going on, Peter’s piece on his crackpot friend is required reading.

    Though I am famous for assigning motives (re:9/11 discussions), let’s NOT assign a motive inside Peter’s story. That is, let’s not claim that there is a cabal out to take over the world. Re-read Peter’s piece and remove that sentiment – then evaluate what is left.

    The FED was created by a conspiracy of the owners of the 5 largest banks of that day. The government DID transfer the issuance of money to FED. The Treasury Dept. only job today is to create Treasury Bills, where it sells the to the market – and what remains is purchased by the FED.

    It is the latter ‘creates’ money – follow: Gov makes a T-bill, FED buys with new currency, Gov (and here is the an important point) spends the new currency FIRST, before it causes inflation.

    The second action the FED does is run the fractional reserve system – that is, banks deposit capital with the FED and are allowed to loan 9x of that deposit to borrowers. This, too, increases the money supply and is inflationary.

    With this in mind, look at TARP. Billions of government money was ‘loaned’ to the banks. But which banks? The large banks – the same ones that control the FED. The little banks are being allowed to fail. Failure means being taken over by one of the large banks – for a depositor, nothing effectively changes.

    This is a mass consolidation of the American banking industry.

    As far as USwep’s question, is the bailout good? Yes, it is if you are a senior banker of a one of the biggies – its very good. Is the bailout good for Americans? – probably – the collapse of the banking system would destroy division of labor and kill millions of people. Is the FED a good thing? Absolutely not. It is the cause of the banking chaos with their ‘easy credit and fiat monies’ policy. So how does America extricate themselves from this cartel without destroying the nation?

    Well, very carefully – taking the knife out of a beating heart has to be done with the utmost care and precision. I do not see anyone in government with that level of skill – so it we will have to have to abide by the selfish motives of the bankers.

    Bankers live in big houses. They have very high lifestyles and are incredibly aware it is due to the high division of labor.

    They would be among the biggest losers if the nation’s financial system collapsed. They would be among the first to be hanging from the lamp post. That risk sharpens a mind.

    The FED is made up of these guys. They will do what ever they need to to save the big banks. They will let the little banks die. They will not let the big banks die.

    The bankers have stopped lending. For the first time in most peoples lives, there has been a deflationary contraction in the money supply. Loans are being repaid, but not re-lent. No banker trusts the market. They trust 0.15% interest paid by the FED on excess reserves.

    Bankers will need to start lending. They are losing their shirts with costs that cannot be met by 0.15% ROI.

    When the time comes to chose between the government or the nation’s finances, it will be a choice between hyper-inflation and death OR collapse of the federal government. They will chose the latter – the latter they can survive in style, the former – they hang from lamp posts.

    However, the collapse of the federal government will begin the unraveling of the cartel of banking. The bankers will have saved themselves, but their house of cards will have fallen also.

    What comes behind that? Can’t say – too many variables – and remember, the future is undetermined – it COULD go to hyperinflation; it COULD be the situation is beyond even the bankers ability to prevent its collapse; the collapse COULD be asymmetrical – disasters (such as California going into default) could cause the FED to break off its support to them, but support, say New York – fragmenting the nation.

    But the point is, we are in the hands of maybe 10 men who are trying to remove the knife from the heart of the nation and still keep it beating during the process and not let the patient bleed to death – all at the same time.

    They are not sleeping well at night – I assure you.

    • PeterB in Indianapolis says:

      Ooohh… I made the “required reading” list 🙂

    • USW, Flag,

      Good article and post. Mathius, back from Venus? Have found insight in your posts as well. I have little to say, think it was best the government acted, but unless the banks are downsized, we are just putting this same problem off for another day.

  15. Black Flag says:

    Oh sorry, I meant to answer this question of USWep too.

    So the question that I am sure you are asking is, “If their ‘crisis’ was there, why didn’t they simply take control of the financial industry then under the claim of an ‘emergency’ rather than playing this game?”

    Complete nationalization of the US banking industry would signal the end of the US$ as a reserve currency. The global banking system would yell “Short the Dollar, the game is over!” – and panic would cross the global in 10 minutes.

    The bankers are trying to prevent the collapse of the US$ – not cause it.

    They are balanced between taking control and not looking like they are taking control.

    • PeterB in Indianapolis says:

      In the game of the “Great and Powerful Wizard of Oz” the people must be kept focused on the mystical and powerful-appearing image of the wizard.

      Once they begin to pay attention to the man behind the curtain, the game is over.

  16. Black Flag says:

    Mathius

    My thoughts off the cuff:
    1. Since when do you (or anyone on this site) have a problem with companies growing as a result of tax breaks? Subsidies, I understand, but tax breaks? Isn’t that your favorite thing ever?

    No.

    To have tax breaks you need to have tax.

    Taxation is a tool of economic manipulation by government.

    “Tax this” tends to make less of it – “Tax subsidy or break” make more of that.

    However, such manipulations are for political reasons – hence, not economic.

    Since they are not economic, they drag and degrade the economy of the nation and pull it back into stagnation or collapse.

    2. There was quite the debate over the roll of the Federal government, as you well know. I think it is unfair to say that the Founders deliberately tried to preserve power for the states at the expense of a centralized government. I will do some more research today, but my impression (from 10th grade history) was more to the effect that they compromised because the states would never have signed on otherwise. Some wanted more / some less. They were, after all, a diverse group of intelligent people – and as we know, a diverse group of intelligent people can have very different ideas of the roll of the federal government.

    But Madison won. He wanted an all-powerful Central government – and that is what he got (eventually)

    5. I wouldn’t say that large banks pose a hazard in and of themselves. Rather, unregulated large banks can be an issue. In the mad pursuit of profit, and don’t tell me that these companies have your best interest at heart, they will screw the customer, the economy and their own grandmother if it means an extra penny per share for the stockholders. By exercising control, the government can (largely) keep things in check to the benefit of us all.

    No, since (in their greed) they need a robust economy.

    They cannot have a lifestyle of riches without a high division of labor.

    This stays their hand of “screwing”.

    Government regulation only exists to improve the banking cartels position of manipulation – not control it, Matt!

    Regulation PREVENTS alternative banking relationships and alternative forms of money to compete with the cartel’s banking scheme.

    If you want the system to ‘stop screwing the people’, removing the regulation would do this. The people would chose their own form of money independent of the cartel – and the game would end for the cartel.

    As long as the preaching of government regulation, the cartel wins and Matt, you lose.

    Oh, and I got a letter in the mail the other day telling me that the interest rate on my credit card is going up to the high 20’s percent (the actual number eludes me). Fortunately, I religiously avoid credit debt for just that reason, but consider that number for a minute. Calling it 25% for the sake of argument, the bank is unilaterally declaring that it’s going to charge 1/4 of all credit debt as interest? It sounds to me like usury, and something that should be regulated – but you might disagree.

    It is usury, by definition, but it is reasonable.

    Credit card debit is unsecured – and also the #1 default of most Americans.

    You will rather lose your credit card before you lose your house.

    Credit card companies are facing massive losses – and the risk of MORE debt is too high – hence, higher interest rates.

    Regulation will destroy access to credit – which is precisely the problem in the economy, no one is lending.

    Be careful mucking in the economy, Matt – you end up screwing yourself every time.

    Hope you’re not leaving me here all alone.. I need allies in this cave..

    God help you if you think GG is helping your arguments……

    I have a pretty clear-eyed understanding of the financial industry given my place within it. That said, I do not specifically want large banks, all I said above is that large banks in and of themselves, are not a problem as long as they are well regulated. A Mack truck is very large – but we have rules to keep them from behaving erratically. If we didn’t, it would be a menace to other drivers.

    Utterly bizarre thinking. Big Mac trucks – in their own best interest – avoid collusions, not because there are rules against collusions!

    There are no rules against collusions!

    You cannot show me such a law – there are rules of the road so that people have predictability on the highway.

    That is, you expect people to pass on the left side of your car when coming toward you.

    Naten53

    When talking about what the founding fathers really inteneded I feel it is important to include “The Articles of Confederation” which served as our first constitution. Even though the source is open, I just looked at the wikipedia entry and I feel it gives a just amount of information on what the Articles are and why people felt that the Constitution was needed.

    Madison felt that the Articles prevented the centralization of government power – allowed the States too much freedom.


    Mathius

    I’ll take a look, but I should add that the Founder’s opinions on modern finance is irrelevant. They could never have imagined the modern financial industry – stock, bonds, CDX’s, CDS’s, MBS’s, futures, convertibles, CFD’s – these things would have meant nothing to them. Likewise, they could never have imagined the interconnected environment within which they operate. With respect to their (substantial) foresight, it is like asking what Genghis Khan would have thought about the auto industry.

    They had a very astute understanding of finance, Matt.

    History demonstrated, 100% of the time, that government destroys the economy by fiat currency and perverting the currency.

    They even witnessed it themselves (“not worth a Continental ” is a saying coming from their time).

    How the free market organized its financial affairs had no bearing on them. They couldn’t have cared less. All that matters was ‘sound money’.

    But in government, “sound money” is a contradiction.

  17. USW…side note. In Texas, we have instituted Tort reform on our health and on insurance claims and workmens compensation. (Limits have been imposed and lump sum awards taken away, etc.)There is a move afoot to start holding public officials financially accountable in the decisions they make. (Ie: Passing a law that creates liability issues and then pass a law that exempts the makers from that same liability.) It is on our docket and has a lot of support. Enough support that it is gaining ground very fast. How do you think that would stack up on the Fed level? (Future discussion, of course). I wonder how much federal pressure will be applied here. There was a lot of Federal Pressure to stop tort reform but we ignored it and it passed our State by a very large margin.

    • Black Flag says:

      Unlike the State level, the People cannot drive legislation.

      Such accountability is beyond the People’s control when addressing Federal policy.

      • I am sure of that. There was a blurb this morning about the “health panels” and “rationed” care. A similar question was asked that if a health panel under the nationalized system denied care and that individual died or was worse off as a result of that denied care, could they sue the government or the panel that denied said care. The answer of course was no.

    • D13,

      Cool, maybe it will take hold state by state, like concealed carry did from Florida. States recognized what was solving problems in other states, and copied.

      • It is resonating well and is resonating well in the Hispanic community as well…this shocked me but, I will say, the citizen Hispanics deplore our immigration policy as much as everyone else and seem to be quite conservative.

        • D13,

          I have been told most illegals are what they consider the
          bottom of the barrel. Good immigrants enter legally, and work toward citizenship. And therefore, its likely they view them as criminals, just as we do, and many are criminals in their own country.

          • Well a LOT of them, not ALL, may not have been criminals back in Mejico but they damn sure are here. A lot of them in GA are in the Gang and Meth business.

            Or, I will admit, maybe it just seems that way.

            28 years ago when I graduated from High school, there were no illegals, no gangs, and the only drugs we had was marijuana.

            Now we are overrun. We have several gangs, all Latino.

            We have the BIG problem of meth addiction. Which admittedly is also everywhere else. But then, there are also illegals everywhere else too.

        • D13,

          My mom came to the US from Peru back in the late 50s. She’s 80 years old now, but is very active in the anti-illegal immigration movement. She tells me that the immigrants that are coming in now, for the most part, have no interest in becoming Americans. They have very little love and respect for this country and are here for the goodies.

          My ex husband, who is from England, also came to the US for the easy living (or so he thought). He complained about how unfair America was, how racist (he’s white), how hard it is to make it in America, etc. Then he applied for, and received citizenship. When I asked him why he wanted to be a citizen of a country he disliked so much, he told me he would get more benefits if he was a citizen instead of a legal resident. It made no sense to me because I provided him with damn near everything. Needless to say, after almost a decade of supporting an ungrateful you-know-what, I finally provided him with divorce papers. My point in all this, is that a good number of recent immigrants have little if any loyalty to this country and are interested in getting what they can from it.

  18. PeterB in Indianapolis says:

    http://www.rockfound.org/about_us/press_releases/2009/081309caw_ss_poll.shtml

    A MASTERFUL example of the government creating an entitlemet program which was never needed, making a large number of people dependent on it, and then convincing everyone that they must put EVEN MORE MONEY INTO IT so that the people who are dependent on it will not starve.

  19. Black Flag says:

    Bears repeating:

    Banks will not lend, even though they have reserves to lend.

    Banks are keeping excess reserves with the Federal Reserve, thereby refusing to lend money to the general public.

    Congress is not willing to accept this much longer. Neither is the Obama administration.

    So, the Federal Reserve System is going to have to fish or cut bait.

    It is going to have to decide whether or not it is going to subsidize the banking system: the decision of bankers to hold reserves with the Federal Reserve, thereby sterilizing the expansion of money that the Federal Reserve has produced since last September.

    I don’t think the Federal Reserve wants either outcome.

    On the one hand, it is terrified by the zero-bound economy that it has created.

    On the other hand, it is terrified by the thought of what the expansion of the Federal Reserve’s monetary base will do the money supply, and from there do to consumer prices.

    We are all going to feel a great deal of pain over the next few years.

    The question is : “How soon will the FED decide to un-sterilize its monetary base?”

    This raises a practical question: “What can a small minority of Americans do to beat the rush to the lifeboats, before they fill up?”

    The majority will not be able to escape the sinking ship of state.

    • Alert in Michigan says:

      Ok; I’ll bite. I’m not sure if you intended this to be rhetorical or not, but what is your answer to this question: “What can a small minority of Americans do to beat the rush to the lifeboats, before they fill up?”

      • Black Flag says:

        If you knew your currency would be cut in half of value, what would you do?

        • Alert in Michigan says:

          (um, taking semi-educated guesses here:)

          a. pile up currency (if x amount of groceries will cost twice as much I need 2 times the cash)

          b. pile up non-currency (real estate? minerals? things that will be of value to other people in a crisis?)

          c. diversify “holdings” of cash, supplies, land, etc.

          d. all of the above

          e. none of the above

          • Black Flag says:

            B.
            What do you need to live for a year?

            What do you think other people will need to live for a year?

            What can you store for a year that people will need?

            A.
            Short term, cash is king. Deflation is occurring – inventories are being sold off at near fire-sale – housing prices have dropped by 2/3 (see above)

            C.
            Fastest way to be a millionaire is borrow a million, buy a million worth of property and let inflation pay it off.

            …..so where is your needs or ability?

            • Alert in Michigan says:

              For tonight my need is sleep…for tomorrow I come back to the discussion. 🙂 Thank you for your help so far…

  20. Black Flag says:

    http://research.stlouisfed.org/fred2/graph/?s%5B1%5D%5Bid%5D=AMBNS

    To understand the threat of inflation and the looming disaster – review this graph.

    The adjusted monetary base over dates of the last 100 years.

  21. Just thought I’d stop in and say HI to everybody, and I hope everyone’s day is going good for you all.

    Judy

  22. Black Flag says:

    GG

    I appreciate the short background – explains a lot.

    A couple of questions, though.

    If a man holds an unreasoned position, should a man change his position if reason dictates?

    If a man contradicts his core belief, what should he do?

    What is your core belief?

    PS: My postulate does NOT start with ‘no government’ – that is the conclusion of reason and logic (if one is to remain consistent with my core belief)

    • You better step light BF. The guy who knocked out the windows at the Democrat Offices in CO was decribed as a Violent Radical ANARCHIST.

      I jumped up quick and defended you to my wife saying, “BF is the exact opposite of violent”.

      You best be careful though. Give Holder a chance and he’ll have the Fibbies out there to surround you like youi’re David Koresh.

      • PeterB in Indianapolis says:

        Esom,

        In the linguistics of those who desire to control, Anarchy = Chaos.

        As Kent McManigal describes on his web page, the definition of Anarchy is actually quite simple:

        an (without) archos (ruler)

        so, OF COURSE by current standards Anarchy is “radical”. Violent? Not by those that truly understand it. One of the requirements is that as your own ruler, you are 100% RESPONSIBLE for your own actions, so you realize that violence is an absolutely horrible idea for achieving anything other than defending yourself against violence from someone else.

        If I am 100% responsible for my own actions, and BF is 100% responsible for his own actions, it is a virtual certainty that we are NOT going to behave violently towards each other.

        • Oh yeah Pete. I know you’re not violent. BUT, consider the last few. How many radicals have exploded out of the woodwork, and then after they commit some horrible act of violence, the news media tries to paint anybody under that same label (right-wing, militia, or whatever) with the same radical paintbrush.

          Think about the idiot that shot the Abortion Doctor, and the cat who opened fire in the Holocaust Center. What did the media and a few idiots in the government say about the rest of the conservatives and right of center folks?

      • Black Flag says:

        Believe me, I am very aware my peaceful existence is the largest threat to the elite.

        Been there already (remember story about me retreating into living in a 5-star hotel after threats to family?)

    • PeterB in Indianapolis says:

      I appreciate the background information too Greatergoodcs.

      Politically/philosophically I was once pretty much exactly where you are now. I once believed that only government could possibly solve all of the problems created by man.

      I then came to realize that government was the SOURCE of most of the problems created by man.

      I may not ever convince you of this, and that is fine.

      • Greatergoodcs says:

        I don’t believe gov’t can solve “all” problems. I just don’t think without it we can save many.

        • Black Flag says:

          Violence and coercion on non-violent people creates more and worse problems then it solves.

    • Greatergoodcs says:

      Man need NOT change his position (no way). Why must there be a black/white to everything for you, BF (regarding contradictions). The world is one big grey area (to me).

      I’ve stated my core belief. I (I’ll regret this) believe it does “take a village” (as much as I can’t stand HC, I don’t think she believed that for a second).

      • Black Flag says:

        Man need NOT change his position (no way).

        If a man refuses to change his irrational position, what will be the consequence?

        Why must there be a black/white to everything for you, BF (regarding contradictions). The world is one big grey area (to me).

        There are infinite number of right answers to every problem.

        (Think this: how many answers to the number “4” …2+2…1+3…14332105-14332101… etc.)

        Most problems, however, only need one answer at a time 🙂

        Being in contradiction demonstrates irrationality (believing 2+1=4) and just like getting addition wrong, there are real consequences that the Universe delivers (such as mis-measuring your step, and over a cliff you go).

        Contradictions in the universe cannot exist. The Universe ruthlessly punishes them.

        When a man attempts to enforce a contradiction from his internal belief to reality – he creates evil. His is trying to pervert the universe.

        I’ve stated my core belief. I (I’ll regret this) believe it does “take a village” (as much as I can’t stand HC, I don’t think she believed that for a second).

        That’s not a core – that is a belief that is a derivation from a core.

        So, let’s dig deeper, brother!

        Why does it take a village?

        • Greatergoodcs says:

          I thought it was obvious (my bad). I don’t trust man on his own.

          • Black Flag says:

            But a village is made up of men, of whom you do not trust.

            Does not that make the village untrustworthy as well?

            • PeterB in Indianapolis says:

              In mathematics:

              If one man is untrustworthy by a factor of 1, 10 men are untrustworthy by a factor of 10, and 100 men are untrustworthy by a factor of 100 (and 535 men are untrustworthy by a factor of… well… infinity :))

              In “social sciences”:

              If 1 man is untrustworthy by a factor of 100, then 10 men are only untrustworthy by a factor of 10, and 100 men are only untrustworthy by a factor of 1 (and 535 men are SUPPOSED TO BE 100% trustworthy :))

            • Greatergoodcs says:

              Just when I thought I was out … Black Flag pulls me back in.

              Seriously, I’ll need a 12-step program to get away from this guy.

              Yes and no is the answer to your question, BF. I think man can reason best within groups. It isn’t a perfect answer, but everyong flying solo I suspect would lead to a lot of crashing (if that makes sense).

              Hey, if I disappear, it’s one of 2 things: I got whacked (in the employment sense) … or I got busy (also in the employment sense).

              Have a GREAT weekend if I don’t catch up with you guys again.

              • Black Flag says:

                How does a man reason with another man?

                How does one man know that the other is a reasoned man?

              • Black Flag says:

                Happy weekend to you, too.

              • Greatergoodcs says:

                These are questions I can’t answer but insist that you can’t answer their corollary to my satisfaction. And that is where our breach is.

              • Black Flag says:

                Too squshy, look down.

              • PeterB in Indianapolis says:

                I hope that if you do get busy, it is in the gainful employment sense as opposed to the no longer gainfully employed sense.

                Also, I agree that people function better in groups.

                I think they function great in groups all on their own. I think that your position is that they require outside force to make them play nice when they are in groups.

                Also, as BF likes to point out, a lack of government DOES NOT MEAN a lack of rules.

                Lack of government simply means the presence of moral rules (and I do NOT mean religion).

                You could ask, “who makes and enforces the so-called moral rules that allow people to play nice together in groups?”

                That is an interesting question 🙂

              • Greatergoodcs says:

                Ah, morality? Define it? I suspect our perspectives on it are vastly different. And that doesn’t make it impossible to come up with a basic set of rules based on a compromise of the definition. As I said earlier (the yes and no) answer I gave. It isn’t a black/white answer because there is none.

              • PeterB in Indianapolis says:

                Does action A impose upon or harm any individual in any way?

                If so, then action A is immoral (my definition)

        • Great question. I will await his answer.

        • PeterB in Indianapolis says:

          BF,

          The problem which you have is you have to convince him that his position is irrational and contradictory.

          I can speak from personal experience that when you are standing in a spot that is irrational and contradictory, and yet everything APPEARS to be “just fine”, it is very difficult to be convinced that the position which you are in is irrational and contradictory.

          It is like watching a Western movie where the good guys are wearing the black hats, or watching a movie where the pirate with the black flag is the good guy.

          You may not ever adjust your perspective to where this “makes sense” to you, or you may adjust your perspective to where it makes sense to you, but if you are FIRMLY CONVINCED that the bad guys wear the black hats and the pirate with the black flag is automatically evil, the adjustment is often bizzare and painful at first 🙂

  23. PeterB in Indianapolis says:

    Big Money and Big Government CANNOT be de-coupled. It is a physical impossibility and denies economic reality.

    The Soviet Union attempted to de-couple Big Money and Big Government, and it only took about 70 years for THAT experiment to fail 🙂

    In order for Big Money to wield big influence, Big Government is necessary.

    In order for Big Government to wield big power, Big Money is necessary.

    The only way out of the mess is to make goverment SMALL or eliminate it entirely. Making the government absolute either makes that government unsustainable or makes the influence of Big Money absolute.

  24. Black Flag says:

    Here are some ads.
    Some ads for houses:

    $48,000
    2247 Lakeview Circle, Pittsburg
    Previously sold in 2006: $228,000

    Size: 3 bedrooms/ 1 bathroom, 925 sq. ft.
    Year built: 1958
    $69,000
    412 9th W. St., Pittsburg
    Asking Price: $69,000
    Refinanced in 2005: Valued at $242,000

    These are MASSIVE losses. Expect worse.

  25. Black Flag says:

    Who are not suffering?

    Goverment, of course.

    Public retirees:

    * On Monday, our fellow watchdogs catalogued the retirement pay for Assistant Sheriff Jack Anderson ($116,225 a year),

    * and for Assistant Sheriff J.B. Davis ($141,600 a year),

    * and for Captain Christine Murray ($90,459 a year).

    * There was last week’s story about the comfy retirement that awaits Bryan Speegle, former embattled director of the county’s Public Works department (who also headed up the county’s doomed El Toro Airport project), who will earn $115,000 a year.

    * We also pointed out the retirements enjoyed by former Sheriff Mike Carona( $207,979 a year),

    * former assistant sheriff Charles Walters ($223,218 a year)

    * and former treasurer-tax collector Bob Citron ($92,900 a year).

    * Of course, all that’s nothing compared to Bruce Malkenhorst Sr., who collects the highest municipal pension in California – $499,674 a year – after serving as the city of Vernon’s city manager, finance director, redevelopment director, city clerk, city treasurer and head of the municipal light and power operation– all at the same time. (He’s under indictment in Los Angeles County, and the case is pending).

    * Unsustainable? Sheesh, even former Anaheim city manager Jim Ruth (one of California’s highest-paid retirees at $219,045 a year) says it’s unsustainable.

    http://taxdollars.freedomblogging.com/2009/08/25/golden-parachutes-for-public-retirees-are-unsustainable-experts-say/32093/

    • Ain’t that some SH–!! And here in the State of Georgia, we are being forced to take furlough days to save the state money.

      • Hey Esom

        My sister works for the Oakland Police Department, as any of you may know, I mentioned it several times before. Anyway, she got her hours cut in half, which means half the pay, now she has to take mandatory days off with out pay, and she’s still not sure how much longer she’ll be working there if they pass out any more pink slips.

        She said they passed out a bunch, but she didn’t get one this last time, but they might be starting to give out more, and there is a chance she might get one. That’s why they have been cutting jobs at the police department, to save money.

        She said that the officers are already doing jobs that the civilians were doing on top of their own police work. So you’re not the only one who has to take mandatory days off. Guess it’s happening everywhere.

  26. Black Flag says:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aAOhgVw78e3U

    Back on subject:
    Federal Reserve Says Disclosing Loans Will Hurt Banks

  27. Hi All

    Thought this might fit in with today’s topic.

    Hope all is well.
    ____________________________________________________________________________-

    Consumer Spending Ticks Up in July; Incomes Stay Flat
    The Commerce Department said Friday that consumer spending rose 0.2 percent in July, matching economists’ expectations. Personal incomes were unchanged last month, a weaker showing than the expected 0.2 percent gain.

    Consumer spending edged up in July with help from the popular Cash for Clunkers program, but household incomes, the fuel for future spending increases, were flat.

    Consumer spending is the big question mark as the economy struggles to emerge from the recession. Economists worry that households hurt by rising unemployment, weak income growth and depleted investments will not provide the support the economy needs to rebound to sustained growth.

    The Commerce Department said Friday that consumer spending rose 0.2 percent in July, matching economists’ expectations. Personal incomes were unchanged last month, a weaker showing than the expected 0.2 percent gain.

    With incomes flat in July as spending rose, the personal savings rate dipped slightly to 4.2 percent from 4.5 percent in June. The savings rate was 2.6 percent a year ago.

    Economists expect the savings rate to rise in coming months to around 6 percent as workers try to rebuild depleted nest eggs. The process of rebuilding savings is one of the factors expected to depress consumer spending and weaken the broader recovery.

    The modest rise in spending last month followed a 0.6 percent jump in June, a gain driven by a surge in gasoline prices. Adjusting for inflation, spending rose 0.2 percent in July, and 0.1 percent in June.

    The slight rise in spending reflected a 1.3 percent jump in purchases of durable goods such as cars, a gain propelled by the clunkers program that started at the end of July. Purchases of nondurable goods such as clothing actually fell 0.3 percent last month.

    The unchanged reading for personal incomes followed large swings in the previous two months that reflected payments to individuals from the government’s $787 billion economic stimulus program. Those payments pushed incomes up 1.4 percent in May and their absence in June caused incomes to fall 1.1 percent.

    Incomes have taken a beating during the recession as employers slashed payrolls and forced workers to take unpaid days off to hold down wage costs. In addition, households with sufficient income to hit the shopping malls have trimmed their purchases and boosted savings to cope with a severe financial crisis which sent the stock market into a nosedive last year.

    The concern is that consumer spending, which accounts for 70 percent of economic activity, may not be strong enough to propel a sustained recovery from the longest recession since World War II.

    The Federal Reserve has pushed a key interest rate to a record low near zero in an effort to boost the economy and is pledging to keep rates low for a considerable period even as the economy begins to grow again.

    The Fed is able to make that pledge because inflation is not a problem. A price gauge tied to consumer spending was down 0.4 percent in July, reflecting the drop in energy prices. Excluding food and energy, the price gauge showed a 0.1 percent rise, and over the past year increased 1.4 percent, well within the Fed’s comfort zone for inflation.

    The government reported Thursday that the overall economy, as measured by the gross domestic product, fell at an annual rate of 1 percent in the April-June quarter. It marked the fourth consecutive decline in GDP, the longest stretch on records that go back more than six decades.

    Many economists believe GDP in the current July-September quarter will rebound to growth above 3 percent and remain at that level in the fourth quarter. The economic growth likely will reflect a boost from the highly successful clunkers program to boost car sales and other government stimulus efforts.

    But the fear is that economic growth will slip back in the early part of 2010 as the impact of the government programs fade and unemployment rises. The 9.4 percent jobless rate in July is expected to edge up to 9.5 percent in August and keep rising until it tops 10 percent. That will be a tough environment to see strong gains in consumer spending.

    Some analysts worry that the country could be headed for a double-dip recession in which the economy resumes growing for a brief period only to fall back into a downturn.

    The troubles consumers face have meant tough times for the nation’s retailers. A survey of big retail chains showed that shoppers remained tightfisted in July, a development that raised worries about back-to-school sales and the holiday shopping season later this year.

    In July, mall-based apparel stores fared the worst with Macy’s Inc. and teen retailers Abercrombie & Fitch Co. and West Seal Inc. reporting disappointing results.

    However, apparel discounters like Ross Stores Inc. and TJX Cos. both reported sales gains that exceeded Wall Street estimates. TJX operates the T.J. Maxx and Marshalls chains.

  28. An unintentional high-jack, but this is pretty disturbing:

    http://www.foxnews.com/politics/2009/08/28/senate-president-emergency-control-internet/

    A Senate bill would offer President Obama emergency control of the Internet and may give him a “kill switch” to shut down online traffic by seizing private networks — a move cybersecurity experts worry will choke off industry and civil liberties.

    • Black Flag says:

      The internet is designed to bypass such things.

      Yes, it may interfere but not even China – with far fewer congregation points, could stop the internet in China.

      The mere attempt would signal that the government has lost control, and set off a global calamity that would render the government impotent.

      It would be admitting the end has come – and therefore, cause the end to occur.

      • But are goggle, yahoo and most others based in the US? If a federal marshal shows up at their door with gun, badge and warrant, what happens?

      • BF,

        If shutting down the Internet would cause the end to occur, then why have this option available? I take it Obama WANTS the end to occur????

        • Black Flag says:

          Government is populated by idiots and morons – remember the famous “internet is like a bunch of water pipes”.

          These guys do not know what they speak about. They think there is a big ‘tap’ they control.

          Everyone in DC will think it will be a good idea – it may be passed – it may even be tested – and then they will say “Gee, that was really dumb”.

          • I agree, government is populated by idiots and morons. Unfortuanely, these idiots and morons have a lot of power. So why is it they believe this to be smart and necessary? To folks like us, it doesn’t make sense to do. But for them it does. Why? People, and governments tend to do things for a reason. What is the reason? What are they planning? It could be good old fashioned stupidity, and if this were the Bush Administration, that would be my guess, but now, we have Obama and crew. Look at the czars and everything else that’s going on. This could be just another piece of trap they’r setting for us….

            • Black Flag says:

              Government has always been the gatekeepers of information.

              “Minister of Propaganda”

              Information is the primary method that governments manage to hold onto legitimacy.

              The USA was founded on the sense of open and free communication – it was the way to measure government legitimacy – if government acted illegitimate, free communication exposed it and government would fall.

              All government actively work to cease communications – in revolt, what is the first thing the rebels seize?… Radio, Newspaper, TV… so to control access to communication and control the message of legitimacy.

              The internet is the single greatest threat to government legitimacy.

              Thus, the government is trying to do what it always has done – seize the microphone.

              However, the internet is no longer ‘a place’, like a TV station. It is everywhere

              Government still does not understand the internet at all.

      • Then maybe we shouldn’t care if they pass it?

        • Or, it could be another control takeover, just like with everything else they took control of. Just a thought on my part.

        • Black Flag says:

          We should care in this sense….

          …they are afraid…

          Fearful, Evil men are incredibly dangerous

          • It’s just getting more and more ridiculous. What are they so afraid of? If anybody is evil BF, I think it’s Obama, more so than any other.

            • Judy,

              It ain’t just Obama. Have you read up on some of his czars? Those people scare me as much as Obama does. They are accountable to him, and him alone. What are they doing? You don’t hear much about it. Its quiet, too quiet……..

  29. Black Flag says:

    Greatergoodcs

    These are questions I can’t answer but insist that you can’t answer their corollary to my satisfaction. And that is where our breach

    Ah, but we can and more importantly MUST answer them.

    You have stated that reason is a requirement of yours – to determine rightful action. If you cannot recognize reason, how can it be a requirement?

    The corollary (which is, “what logically follows without proof”) of reason is action aligned with the Universe, hence, moral action.

    • Greatergoodcs says:

      Sorry, I don’t buy it. I can in fact recognize reason. Reason changes when others are brought to the equation. Man must be malleable to other considerations. You don’t buy into that. I understand where you’re coming from, but don’t see it as a viable option.

      • Black Flag says:

        2+2=4 does not change, no matter the size of population.

        “Black is White” is always a contradiction, no matter the size of population.

        Reason and logic, like truth and fact, is immune to majority vote.

        So, if you CAN recognize reason – by what path should a man follow – one of reason or one of fallacy?

        • Greatergoodcs says:

          3+1 also equals 4 … seek that combination, grasshopper. Seek any combination that will get you to the promised land, but in seeking it you will HAVE to deal with others (as in compromise/gov’t).

  30. PeterB in Indianapolis says:

    From Greatergoodcs self-description, I can see that the source of his bitterness is generally called disillusionment.

    He thought that Bush would get the government to “be good”.

    Didn’t happen.

    He thought that Obama would get the government to “be good”.

    Didn’t happen.

    He is now disillusioned and bitter. However, the target of his bitterness is misdirected.

    He seems to still be convinced that the government can “be good” and that it is simply the structure of the government and the people that make up the government and the people that have influence over the government which are the source of the “non-goodness”.

    Because of this he has reached the conclusion that socialism (even more government) holds the solution.

    For me personally, I came to the realization that the government IS THE SOURCE OF THE “non-goodness” regardless of the structure, the people that make up the government, and the people that have influence over the government.

    Many of the people that make up the government WISH FOR GOVERNMENT TO DO GOOD. In spite of this, it does not. Therefore, it is not the particular structure or the particular people that are the source of the “non-goodness”, but it is the government itself. Because of this, for me, socialism (more government) cannot possibly be the answer.

    • Greatergoodcs says:

      Pete, you couldn’t be more wrong. I never thought for a second Bush would be good (go back and read what I wrote) against my social conscience I voted for Bush (for defense purposes).

      I didn’t vote for Obama. I wouldn’t with a gun to my head (because he’s a Democrat). Except for Kucinich, they are sell-outs (Republicans do it with a smile).

      Contrary to your belief, we haven’t had anything near socialism here. Not even close (from my perspective). That is why I’m willing to give it a shot (no other reason).

      • PeterB in Indianapolis says:

        Thanks.

        That clarifies it quite a bit.

        My persective is that we never actually had anything near freedom here (although some of the Founders attempted to make it so that we would), so I’m willing to give that a shot.

        • Greatergoodcs says:

          Were some of those forefathers slaveholders by any chance?

          • Black Flag says:

            Indeed – but that is irrelevant – slavery is immoral, right?

            So if we find slavery today, is it still immoral?

          • PeterB in Indianapolis says:

            Perhaps the fact that some held slaves but supposedly favored freedom might be one of the reasons we ended up with the mess we currently have as opposed to what they invisioned.

  31. bottom line says:

    Global domination. The first world industrialized nations unite and assimilate the second world developing nations through political, economic, and if necessary…hostile means. The third world nations will inevitably follow. It’s essentially “manifest destiny” on a global scale.
    A one world government or New World order is inevitable, as it is simply our natural evolutionary course. There is no recourse other than destroying ourselves. Indulge a hypothetical for a moment. Let’s say we had a unanimous style revolt/revolution big enough to stop them. It would happen anyway because we humans are too great in numbers and to technologically advanced not to. The world is getting smaller by the minute.
    The real question is “how” do we do it. They figured this out years ago. They answered the question of “how” with “the way they see fit”. They are the grandparents of today’s global elite. “They” are the ones that have the technology, weapons, money, and political control. They are the ones that give us words like “globalization” and “democritization”. And they’re trying to maintain their wealth and power through the globalization process by consolidatiion. As you so elequently pointed out,USW, the “too big to fail” turned into the “to bigger to fail”. Their cups spillith over. There is becoming less and less of our money available to give them.
    This repetitive crisis garbage is just a control tactic. It is an excuse to manipulate the system in their favor, providing them with all the money and control they ask of us. Folks everywhere are buying it hook line and sinker. BAAAHAHAHAHAHAAAAHH!! Mass hypnotism at its finest. The principles are simple…Connect-Distract-Suggest. Connect the masses through strong nationalism in time of need to achieve solidarity. Distract them with fear and confusion regarding a national “crisis”. Suggest a solution that solves the problem in a way that gains favor for the ruling entity. The lemmings will run off of any cliff you tell them too.
    The noose is tightening. The reins are being buckled. So many laws have been passed in contridiction to our constitution and founding principles of liberty and unalienable rights. One has to question the real purpose of these laws. Why on earth would they want to infrnge on such rights? They are poised for something. That something is only bound by our imagination. But but IMHO, it resembles something horrific from the past in regards to crisis management, control, and mass hypnotism.

    Page 194- “THE RISE AND FALL OF THE THIRD REICH”-

    On the day following the fire,February 28, He(hitler) prevailed on president Hindenburg to sign a decree “for the Protection of the People and the State” Suspending the seven sections of the Constitution which guaranteed individual and civil liberties. Described as a “defensive measure against Communists acts of violence endangering the state,” the decree laid down that:

    Restrictions on personal liberty, on the right of free expression of opinion, including freedom of the press; on the rights of assembly and association; and violations of the privacy of postal, telegraphic, and telephonic communications; and warrants for house searches, orders for confiscations as well as restrictions on property, are also permissable beyond the legal limits otherwise prescribed.

    In addition, The decree authorized the Reich government to take over complete power in the federal states when necessary and impose the death sentance for a number of rimes, including “serious disturbances of the peace” by armed persons.

    Thus in one stroke, Hitler was not only legally able to gag his opponents and arrest them at his will but, by making the trumped-up Communist threat “official,” as it were, to throw millions of the middle class and peasantry into a frenzy of fear that unless they voted for National Socialism at the elections a week hence, The Bolsheviks might take over…

    Does this sound familiar to you? It should if you’re paying attention. One only has to steer away from willful ignorance and open one’s eyes to see. Take the red pill Neo. I find it interesting that they are, to some degree, following the model of the Nazis. Even more interesting is the connection to american bankers, industrialists and politicians during the 30’s and 40’s, such as Senator Prescott Sheldon Bush A.K.A. Grandaddy Bush. He was chirman of the board to Union Banking Corporation when it had it’s assets siezed during WW2 under juristiction of the “Trading With The Enemies Act”. Americans did their part to fund the Nazi war machine.
    I’m no expert but just as a guess I’d say that if they continue to follow the Nazi model, we will likely see hyperinflation and debt reduction in the future. The Fed is, as I understand it, printing quite a bit of money. Our economy as well as much of europe’s economy is consumer driven import addicted. Other countries have become dependant on us and are thus being assimilated and controlled. We’ll bring them to their knees when we pay back our debt with devalued currency, followed by a massive shift in manufacturing jobs coming back to our respective nations. The powers to be will be will be the “the really big bigger powers to be” and the slave labor of the second world nations will be broke and without jobs, thus rendering them weak and non-resistant to the demands of the new world order. A massive shift in the global market will take place and the only way countries will be able to compete is by forming continental unions with their own currency and eventual adoption of a world currency. These “emergency fixes” to our percieved financial woes are a bullshit control tactic to make the rich richer and give them all the control they want via socialism/fascism. It’s just another step toward a world consolidation of power…Not what they tell us it is.

    “A man always has two reasons for doing anything: a good reason and the real reason.” ~ J. P. Morgan.

    KNOW YOUR ENEMY _RAGE AGAINST THE MACHINE

    Know your enemy!

    Come on!

    Born with insight and a raised fist
    A witness to the slit wrist, that’s with
    As we move into ’92
    Still in a room without a view
    Ya got to know
    Ya got to know
    That when I say go, go, go
    Amp up and amplify
    Defy
    I’m a brother with a furious mind
    Action must be taken
    We don’t need the key
    We’ll break in

    Something must be done
    About vengeance, a badge and a gun
    ‘Cause I’ll rip the mike, rip the stage, rip the system
    I was born to rage against ’em

    Fist in ya face, in the place
    And I’ll drop the style clearly
    Know your enemy…Know your enemy!

    Yeah!

    Hey yo, and dick with this…uggh!
    Word is born
    Fight the war, fuck the norm
    Now I got no patience
    So sick of complacence
    With the D the E the F the I the A the N the C the E
    Mind of a revolutionary
    So clear the lane
    The finger to the land of the chains
    What The land of the free
    Whoever told you that is your enemy

    Now something must be done
    About vengeance, a badge and a gun
    ‘Cause I’ll rip the mike, rip the stage, rip the system
    I was born to rage against ’em

    Now action must be taken
    We don’t need the key
    We’ll break in

    I’ve got no patience now
    So sick of complacence now
    I’ve got no patience now
    So sick of complacence now
    Sick of sick of sick of sick of you
    Time has come to pay…
    Know your enemy!

    Come on!
    Yes I know my enemies
    They’re the teachers who taught me to fight me
    Compromise, conformity, assimilation, submission
    Ignorance, hypocrisy, brutality, the elite
    All of which are American dreams
    All of which are American dreams
    All of which are American dreams
    All of which are American dreams
    All of which are American dreams
    All of which are American dreams
    All of which are American dreams
    All of which are American dreams

  32. Bottom Line,

    I made similar assertion about a month ago and caught some flak for it. I agree with you as to what’s really going on. I wonder if middle class Germans back in the 1930s felt the way I do now? We are being set up for something as equally horrific as the Third Reich.

    • Cyndi,

      You are such a kook, but then so are most who post here. LOL You bring up a good point, on Beck last night, he was talking about Obama’s “civilian force” that was to be formed, because the military cannot achieve the security this country needs. Beck asked, “Mr. President, who is this civilian force, that’s to be as strong and well funded as the military, going to be protecting us from?”

      It seems the military is handling foreign threats, so it must be a domestic threat they are worried about, didn’t homeland security warn us about right wing extremists? That must be the threat. Glad I’m not one of them, took my Ron Paul bumper sticker off months ago.

      I think Peter said if they resort to calling you names, its because they don’t know the answer. So what time is it over there? 2:30 cst here

      • PeterB in Indianapolis says:

        Yes, LOI, that was me.

        I basically said, if you are trying to argue with someone using reason and logic and they resort to calling you names, it is because they realize that their position cannot stand on reason and logic, so the only way to discredit the argument that does stand on reason and logic is to attack the person rather than the argument – i.e. call names.

      • PeterB in Indianapolis says:

        By the way, that is why it is cute and funny when you call Cyndi a kook, because you admit to being in the “brotherhood of kooks”.

        If you called her a kook because you were disagreeing with what she was saying, then you would have fit my “name-calling” example 🙂

      • LOI. Those Conspiracy Theories are beginning to look a little more like just Conspiracies now, aren’t they?

        • Truth there brother!! I remember being amazed during the election campaign, when Obama said that about the civilian
          force to be as powerful as the military, and he paused, and the people applauded!!!!!!!! Talk about kool-aid drinkers!
          I still can’t believe they understood what he was saying he was going to do.

        • bottom line says:

          EHG …Conspiracy theories aren’t always theories. I never gave them much credit, argueing that our checks and balances guard our way of governance and that stuff just isn’t so. Then I saw something on the net a few years ago that resembeled what I saw that night while participating in military/NASA classified ops. Turns out there are conpiracy theorists and debunkers alike, argueing the realities/falsehoods of something that I KNOW exists, and I KNOW they have lied to the public about. Conspiracy theorists are exaggerating what they think is the truth. But they’re definately on to SOMETHING.

      • Hey There LOI!

        Its coming up on 8am Saturday morning. I’ve got the day off, though I’ve got to go in for a few hours tomorrow. I’m supposed to be making a new dress today but I’m having trouble staying away from the keyboard this morning. 🙂 My Obamabot Boyfriend will tease me about looking at ‘those Right Wing websites’ again. LOL If the weather is nice this afternoon, I’ll probably head out to the pool for awhile.

        Ya’ll are too funny this morning. I need a good laugh after the week I’ve had, and the recent Obama actions. I maybe a kook, but it seems I have some good company in KookUniverse!

      • bottom line says:

        LOI, It’s springtime for obama. Apparently brownshirts are back in style with a brand new wordrobe. What color are there shirts this time? lol check this out…I submit for your entertainment…”SPRINGTIME FOR HITLER” from the movie “THE PRODUCERS”….http://www.youtube.com/watch?v=WCUfkMkVbwo

    • bottom line says:

      I’m not sure we’ll end up like Nazi Germany, seeing how we have the 2nd amendment. The founders knew what was up. Smart fellows they were.

      • Not to be a wet blanket Bottom Line, be here goes. …. We’re only one untimely death or retirement of a Conservative Supreme Court Justice away from losing the 2nd Ammendment. Even if the ammendment isn’t over turned, don’t think they can’t disarm us. Guns without ammunition aren’t effective weapons. A coworker of mine belongs to the NRA and he fills me in on what’s going on there. It seems our government is making the acquisition of ammunition rather difficult and expensive these days.

        • bottom line says:

          I have done some some research of the things you speak and am well aware of the situation. My argument is that they can make whatever laws they want. But actually taking them is a different story. IF they could get an army large enough to take them away, they’d be met with FEIRCE resitsance AS SOON AS word spread. Try disarming tens of millions of constitutionally protected rightious american gun owners. There’d be cold dead hands everywhere on both sides. As far as the ammo…they can micro encode and tax the ammo to death and there will always be reloaders and a black market for ammo. It’s like pot. It’s already everywhere and too big for them to do anything about it as it is part of our culture. Of course the nazis did manage to disarm their WILLING people.

          “Germans who wish to use firearms should join the SS or the SA – ordinary citizens don’t need guns, as their having guns doesn’t serve the State.”-Heinrich Himmler

          “The most foolish mistake we could possibly make would be to allow the subject races to possess arms. History shows that all conquerors who have allowed the subject races to carry arms have prepared their own downfall by so doing. Indeed, I would go so far as to say that the supply of arms to the underdogs is a sine qua non for the overthrow of any sovereignty.”- Adolf Hitler

          “All political power comes from the barrel of a gun. The communist party must command all the guns, that way, no guns can ever be used to command the party.” – Mao Tse TungIf

          “the opposition (citizen) disarms, well and good. If it refuses to disarm, we shall disarm it ourselves.” – Josef Stalin

          “Gun registration is not enough”

          -Attorney Generral Janet Reno–12-10-93–Associated Press

          “Waiting periods are only a step. Registration is only a step. The prohibition of private firearms is the goal”

          -Attorney Generral Janet Reno

          “Both oligarch and tyrant mistrust the people, and therefore deprive them of their arms.”

          – Aristotle, Politics Ch 10 para 4

          “1935 will go down in History! For the first time, a civilized nation has full gun registration! Our streets will be safer, our police more efficient and the world will follow our lead to the future!”

          – Adolf Hitler

          I submit that people that argue gun control/disarmament are up to no good.

          • I agree with you Bottom Line. People who argue gun control are up to no good. I also agree that if the government tries anything now, they’ll have a fight on their hands. However, in the future they may not. They are destroying the middle class along with the economy. They are passing laws that give them emergency powers. Obama is creating his National Civilian Security force. Health care will be socialized allowing denial of care to anyone who gets out of line. Political opposition is being demonized. The media is compliant. There are a large number of citizens who openly suport Socialism and are full of hate and contempt for their fellow citizens.

            Obama and crew are preparing the battlefield even now.

            Never say never.

            • bottom line says:

              Yes, your statements are all true. IMO The situation is ripe for revolution and constitutional crisis. I’m interested to see how it will play out.

  33. Black Flag says:

    Greatergoodcs

    Ah, morality? Define it? I suspect our perspectives on it are vastly different. And that doesn’t make it impossible to come up with a basic set of rules based on a compromise of the definition. As I said earlier (the yes and no) answer I gave. It isn’t a black/white answer because there is none.

    But there is!

    I believe you still confuse “there must be only one right answer” with “there are many right answers – you only need one”.

    I cannot determine whether YOUR answer is right or wrong (ie: your belief is right or wrong) from my reference of my belief. I have no objective measure from which to judge.

    However I can judge you the same way the Universe judges you – Are you consistent (that is, without contradiction) in your belief – I can measure that – with reason and logic tests.

  34. PeterB in Indianapolis says:

    Someone brought up the other day that it would be illogical to argue with Mr. Spock who said, “The needs of the many outweigh the needs of the one.”

    Carefully make note that he said “needs”. He did not say “wants”.

    What are the “needs” of the many?

    Food – sure
    Shelter – sure
    Clothing – probably 🙂 (some people need it more than others :))
    Water – sure
    Sanitation – yeah, ok

    Anything else? That seems to sum up the basic “needs”

    What are “the needs of the one”

    Food – sure
    Shelter – sure
    Clothing – again… certain “ones” would be more fun to look at without :), but yeah, ok.
    Water- sure
    Sanitation- yeah, ok.

    So where is this supposed CONFLICT between the needs of the many and the needs of the one. The “many” is made up of a whole bunch of “ones”. All of the “ones” have the same basic needs.

    Mr. Spock can try to logic his way out of that one all he wants to 🙂

    We apologize for this mild thread hijack and return you to your regularly scheduled thread 🙂

    • PeterB in Indianapolis says:

      As BF said in an earlier post:

      2+2 = 4 regardless of the size of the population.

      People do not magically morph into “something other than people” regardless of the size of the population.

      Some people make the critical error of thinking of a “village” or a “community” or a “society” as its own unique and sentient entity that it capable of having needs, wants, and rights.

      The only unique and sentient entities are INDIVIDUAL PEOPLE that make up the “village”, the “community” or the “society”

      There is no number of individual people that suddenly somehow “acquires critical mass” and becomes a unique and sentient entity.

      • 2+2 = 4 regardless of the size of the population.

        Just for fun I will reject your base 10 reality and state that 2+2 = 10.
        sorry too much math backround to pass

        • Black Flag says:

          And, thanks, seed, you demonstrate my point.

          By reason, a premise (Base4) + logic = right answer.

          • v. Holland says:

            Okay you both lost me-what are you talking about and please don’t tell me to look it up-I did- all I got out of it was counting by 4 instead 2

            • in base 10 “10” is equal to 10
              in base 4 “10” is equal to 4
              so 2+2 = 4 in base ten
              the symbol 4 does not exsist in base 4 the value 4 is represented by “10” so both equations are right just different ways of counting
              Im not sure i explained it well enough

              • v. Holland says:

                No, you did great, I get the joke-and the need to add logic-Still do not understand base 10 or 4 or 7 but that’s okay I didn’t expect too without much study-thank you.

  35. Black Flag says:

    From an essay on Mises:

    In a Communist society, he said, in which all property was communally owned, the planners would have to rely on soldiers and hangmen to enforce their edicts.

    Without private property, there would be no private owners bidding for goods and services, and no exchanges among real owners.

    Without private owners, each guided by the desire for profits and the fear of losses, there would be no market prices to indicate what people wanted and how much they were willing to pay for it.

    Without market prices, there would be no competition and no profit-and-loss system.

    And without a profit-and-loss system, there would be no network of interrelated, consumer-directed, independent producers.

    Without private property, competition, market prices, and a profit-and-loss system, the planners would not know what to produce, how much to produce, or how to produce it.

    Except as the planners could observe and copy production in non-socialist lands, they would find themselves “floundering in the ocean of possible and conceivable economic combinations without the compass of economic calculation.”

    Thus a Communist society would be rife with economic waste, malinvestment, production bottlenecks, surpluses of some things, and shortages of others. Certainly it would be no utopia.

  36. Hi Ya’ll! It’s seems slow at the moment, todays subject was about big banks, and big government and their attempt to get bigger.

    With that in mind, I’ve tried for quite some time to figure out how the Feds believe they have the Constitutional authority to take over healthcare. It has been historically a State issue. So if it’s such a big problem as they say, then why havn’t the States dealt with it? And how do the Feds conceive the authority to legislate the healthcare industry?

    G!

  37. We the People Are Obama’s ‘Special Interests’

    It’s become standard operating procedure for team Obama. Identify anyone who dares oppose the White House and then target them for attack by left-wing groups, the media and Congress.

    We need to get special interests out of politics. They spoil everything.

    For once President Barack Obama is right: special interests are messing up health care reform. “Every time we are in sight of health insurance reform, the special interests fight back with everything they’ve got,” Obama told us.

    You’ve seen that quote –or read something like it. Obama’s made some form of that claim on ABC, CBS and NBC at least a dozen times since he took office. Journalists have taken their lead from the president and restated it another 11 times. MSNBC has repeated the same claim. So has CNN, as recently as Aug. 23. The top five newspapers have done the same thing literally hundreds of times since Obama took office.

    And it’s all acting. Considering how much TV time this quote has had, Obama ought to be up for an Emmy. Yes, special interests are at play in the health care debate. But most of them –from lawyers to unions to the companies Obama bullied in to compromise –are now all on his side.

    He is Don Quixote and the windmills fly his banner. But he’s still out there whining about those evil special interests –and the pro-Obama mainstream media repeat the claims like so many public relations flacks. What’s more amazing is that Obama consciously pursued each group for individual deals, made the deals and then acted upset when conservatives still mustered opposition.

    The term “special interests” became political cover for Obama so he could rationalize the fact that millions of Americans still opposed his health care agenda. It was just one of many code words like “AstroTurf” and “hate” that the left use to try to undermine opponents.

    CNN tried to delve into the “special interests” during its Aug. 23 special called “Extreme Challenges: Health Care” where anchor Anderson Cooper led a biased panel of experts to analyze the “vital” issue of health care. Of course the panel included CNN’s Dr. Sanjay Gupta, Obama’s first nominee for surgeon general and a man who backs an obesity tax. Two others, David Gergen and BET’s Pamela Gentry, worked in the Clinton White House, though Gergen also worked for Reagan.

    But the panel managed to touch on the big issue. Most of the groups that are involved in health care reform have already made deals to work with Obama. Take a look at SOME major players:

    – The pharmaceutical industry –They fought ClintonCare in 1993. Today, they’ve got a deal with Dr. O where they claim to cut $80 billion in projected costs and, in return, they commit $150 million to advertise for health care reform. They get a guaranteed hike in their customer base and government won’t quibble about drug costs. They aren’t just on the Obama team, they’ve been co-opted into the starting line-up.

    – Lawyers –There is no group safer from health care reform than lawyers –except maybe congressmen themselves. There will be no tort reform as part of health care reform. Even Gupta admitted that “defensive medicine” might add as much as “up to 15 percent of health care costs.” But Democrats owe much to lawyers and that settles that.

    – Big business –They are actually working with Obama, hoping to offload their costs onto taxpayers.

    The one lone “special interest” group that isn’t totally on Obama’s side is insurance companies. Even then, Aetna CEO Ron Williams has been very supportive of the president. He even appeared on ABC’s trumped up health care panel with the president. So when Obama criticized opponents as trying to stop reform, he was calling out just a few insurance companies as “funding in opposition,” according to The New York Times.

    Those insurance companies are battling the public option but not Obama’s idea of reform. Even that little bit of opposition is already getting them bullied by Congress. FOX News reported that House Democrats” sent 52 letters to health insurers requesting financial records for a House committee’s investigation.” That Rep. Henry Waxman-led salary witch hunt is a direct response from Congress to the one group that dare oppose Obama at all.

    It’s become standard operating procedure for team Obama. Identify anyone who dares oppose the White House and then target them for attack by left-wing groups, the media and Congress. The difference here is that Obama thought he had bought off or intimidated all of his opposition. Health care reform should have had clear sailing.

    When that proved wrong, he and his allies were especially aggressive trying to bash their remaining opponents. In the process, the interests that are being served belong to anyone who does exactly what Obama wants. And the “special interests” of the public that wants government out of health care just don’t matter.

    Isn’t that special?

  38. Your about right on his Chicago politic style. Too bad most of those that support his reform plans were once the “window lickers on the short bus”. They have been proving that over and over (no, I’m not talking about the folks here that support it, they at least think!). Slow day today and quite rainy.

    G!

    • Oops! Meant as a reply to Judy.

      G!

      • Hey G

        I figured you were answering what I put up there, no problem.

        Can you by any chance throw some of that rain this way? It’s hot, muggy, and smokey as heck. Fires in Calif, and all the smoke is coming up here. There was also a fire in the Tahoe area, not sure if they got it out or not, haven’t heard anymore about it.

        • Judy, You can have all the rain you want, just wish I could send it to ya!! We havn’t had much of a summer, Coldest July ever recorded (I’d like to slap Al Gore).

          Hope the fires get put out soon, seems like all my life Cali has had this problem. Of course the AlGorians want to blame Global Warming (can I slap Gore again?).

          I’ll be on tonight for awhile, not much to do sittin here by myself. I’ll put on an NFL game and listen, hopefully there will be some debate tonight.

          Peace!

          G!

          • I’d like to give Al Gore that ever famous slap on the back of the head. SMACK! There I gave him a couple.

            The fires in Cali for what I understand is, is in the Angeles National Forest, and I read that some 800 homes had to be evacuated, but that was earlier today. Don’t know what’s going on now until I turn on the news.

            I hope it starts to cool down here, I’m sick of this heat, had enough. It’s not bad enough it’s hot, but when ever any place catches fire, even if it’s in China, some how, we always get the smoke. I guess we’re lucky the wind always blows everything this way. YEAH!

            There’s been a helicopter buzzing up around our house now for the last 1/2 hour, and I wonder what’s going on up there. Probably looking for an escaped convict from a work detail or something. Happened before. Maybe they’ll have something on the news.

            So, you’re by yourself huh. Where’s your daughter at? Hey, enjoy the peace and quiet. Something I don’t get very much of anymore, unless I’m in bed, or in the shower, or shopping. Just kidding.

            BTW, I left you an email earlier, did you by any chance read it?

            Be back in a bit, have a few things to do.

            Judy

  39. Black Flag says:

    The Socialists Despise Mankind

    According to these writers, it is indeed fortunate that Heaven has bestowed upon certain men — governors and legislators — the exact opposite inclinations, not only for their own sake but also for the sake of the rest of the world!

    While mankind tends toward evil, the legislators yearn for good; while mankind advances toward darkness, the legislators aspire for enlightenment; while mankind is drawn toward vice, the legislators are attracted toward virtue. Since they have decided that this is the true state of affairs, they then demand the use of force in order to substitute their own inclinations for those of the human race, because for the legislators – mankind is evil!

  40. Black Flag says:

    The Fatal Idea of Legal Plunder</b.

    But on the other hand, imagine that this fatal principle has been introduced: Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few — whether farmers, manufacturers, ship owners, artists, or comedians.

    Under these circumstances, then certainly every class will aspire to grasp the law, and logically so.

    The excluded classes will furiously demand their right to vote — and will overthrow society rather than not to obtain it.

    As long as it is admitted that the law may be diverted from its true purpose — that it may violate property instead of protecting it — then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder.

  41. Black Flag says:

    Let Us Now Try Liberty

    God has given to men all that is necessary for them to accomplish their destinies.

    He has provided a social form as well as a human form.

    And these social organs of persons are so constituted that they will develop themselves harmoniously in the clean air of liberty.

    Away, then, with quacks and organizers!
    Away with their rings, chains, hooks, and pincers!
    Away with their artificial systems!
    Away with the whims of governmental administrators, their socialized projects, their centralization, their tariffs, their government schools, their state religions, their free credit, their bank monopolies, their regulations, their restrictions, their equalization by taxation, and their pious moralizations!

    And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun:

    May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works!

  42. Black Flag says:

    H.L. Mencken

    “Politicians,seldom if ever get [into public office] by merit alone, at least in democratic states.

    Sometimes, to be sure, it happens, but only by a kind of miracle.

    They are chosen normally for quite different reasons, the chief of which is simply their power to impress and enchant the intellectually underprivileged….

    Will any of them venture to tell the plain truth, the whole truth and nothing but the truth about the situation of the country, foreign or domestic?

    Will any of them refrain from promises that he knows he can’t fulfill – that no human being could fulfill?

    Will any of them utter a word, however obvious, that will alarm or alienate any of the huge pack of morons who cluster at the public trough, wallowing in the pap that grows thinner and thinner, hoping against hope?

    Answer: may be for a few weeks at the start…. But not after the issue is fairly joined, and the struggle is on in earnest….

    They will all promise every man, woman and child in the country whatever he, she or it wants.

    They’ll all be roving the land looking for chances to make the rich poor, to remedy the irremediable, to succor the unsuccorable, to unscramble the unscrambleable, to dephlogisticate the undephlogisticable.

    They will all be curing warts by saying words over them, and paying off the national debt with money no one will have to earn.

    When one of them demonstrates that twice two is five, another will prove that it is six, six and a half, ten, twenty, n. In brief, they will divest themselves from their character as sensible, candid and truthful men, and simply become candidates for office, bent only on collaring votes.

    They will all know by then, even supposing that some of them don’t know it now, that votes are collared under democracy, not by talking sense but by talking nonsense, and they will apply themselves to the job with a hearty yo-heave-ho.

    Most of them, before the uproar is over, will actually convince themselves.

    The winner will be whoever promises the most with the least probability of delivering anything.

  43. Black Flag says:

    When governments reach the point where they are borrowing to pay the interest on their borrowing they are coming dangerously close to running a sovereign Ponzi scheme.

    Ponzi schemes have a way of ending unhappily…

    • That’s how I view “cap and trade”, nothing but a Ponzi scheme.

      Enjoy your posts!

      G!

  44. Black Flag says:

    Scientists Confirm the Effectiveness of The Big Lie – People Will Go To Extraordinary Lengths to Create False Justifications for Government Misdeeds

    Adolph Hitler wrote in Mein Kampf:

    All this was inspired by the principle–which is quite true in itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods.

    It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously.

    Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation.

    For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.

    Similarly, Hitler’s propaganda minister, Joseph Goebbels, wrote:

    That is of course rather painful for those involved. One should not as a rule reveal one’s secrets, since one does not know if and when one may need them again.

    The essential English leadership secret does not depend on particular intelligence.

    Rather, it depends on a remarkably stupid thick-headedness.

    The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous.

    Science has now helped to explain why the big lie is effective.

    Specifically, sociologists from four major research institutions investigated why so many Americans believed that Saddam Hussein was behind 9/11, years after it became obvious that Iraq had nothing to do with 9/11.

    The researchers found, as described in an article in the journal Sociological Inquiry (and re-printed by Newsweek):

    * Many Americans felt an urgent need to seek justification for a war already in progress

    * Rather than search rationally for information that either confirms or disconfirms a particular belief, people actually seek out information that confirms what they already believe.

    * “For the most part people completely ignore contrary information.”

    * “The study demonstrates voters’ ability to develop elaborate rationalizations based on faulty information”

    * People get deeply attached to their beliefs, and form emotional attachments that get wrapped up in their personal identity and sense of morality, irrespective of the facts of the matter.

    * “We refer to this as ‘inferred justification, because for these voters, the sheer fact that we were engaged in war led to a post-hoc search for a justification for that war.

    * “People were basically making up justifications for the fact that we were at war”

    * “They wanted to believe in the link [between 9/11 and Iraq] because it helped them make sense of a current reality. So voters’ ability to develop elaborate rationalizations based on faulty information, whether we think that is good or bad for democratic practice, does at least demonstrate an impressive form of creativity.

    As the study notes, this tendency of many people to make up false stories to explain why we went to war and then to hold on to such false beliefs in the face of contrary evidence is “a serious challenge to democratic theory and practice”. Until people learn to think more clearly and rationally, they are easily manipulated

    • bottom line says:

      Good post BF. There was a psychology experiment where they underpaid some college students to do a very boring time consuming task. After the test was over, they asked them if they minded lending a hand to the researchers to help them find more test subjects. Most agreed and explained that it was worth it because it was fun and you get paid. They told their friends this too, thus bringing more people to participate in this boring waste of time. The psychologists were trying to test their rationaliztion in regards to the “worth it” aspects of going along with the boring ass experiment with little pay for a Saturday afternoon’s worth of time. Why would they lie to their frinds to convince them it was worth doing? The answer is that they made justifications and rationalizations to convince themselves that it was worth doing rather than accept the truth. Their findings were that “people love what they have to suffer for”.

  45. Hey All

    I got this today from a friend, and thought I’d pass this to all of you. I know some don’t like Glenn or Rush, but you might want to see this.

    hhtp://www.glenbeck.com/content/article/198/29831

  46. Oops left off a letter.

    http://www.glenbeck.com/content/articles/198/29831

    hope this works.

  47. Obama the ‘Post Turtle’

    The days of fancy speeches and adoring rallies are over. The American people have been aroused from their infatuation and will now be judging him on cold hard facts not his rhetorical flourishes. It’s about to get very interesting.

    With President Obama taking some well deserved vacation on Martha’s Vineyard, that well known summer playground of the rich and famous, it might be a good time to evaluate the current state of the Obama Phenomenon.

    By the time of the November 2008 election the country had became so angry at the failures of the Bush administration and of Republicans in general that John McCain was doomed. Fiscal mismanagement, a crumbling economy, rising unemployment and war seemingly without end, was just too much weight for the old fighter jock McCain to carry.
    Republican congressmen, senators and pundits like to lay all the blame for their descent into the minority on George Bush’s presidency and John McCain’s campaign, conveniently forgetting that their own arrogance, lust for power and spendthrift ways had a lot to do with it.
    American humorist of the 1930s and 40s, Franklin Pierce Adams once said,”Elections are won by men and women chiefly because most people vote against somebody rather than for somebody.” And Barack Obama is no exception.
    But that lesson was lost on the Obama folks almost from day one. They did what all politicians and their supporters do after a big victory– completely misread the mood of the electorate interpreting their victory as a mandate to radically reshape American society. They actually believed in their ‘Yes we can” agenda and with their amen corner in the mainstream media calling him the greatest leader since FDR who could blame them.
    But from where I sit, Barack Obama is a”Post Turtle”. What is a”Post Turtle” you urbane urbanites and city slickers might ask?
    Well one day an old cowboy was out ridin’ fence and he saw a turtle balanced on top of a fence post. When he got back to the bunkhouse he told the other fellas that he saw a”Post Turtle”. They all asked,”What the hell is a”Post Turtle”? And he said it was a turtle settin’ on top of a post! He then went on to explain that “you know he didn’t get up there by himself, he doesn’t belong there, he doesn’t know what to do while he’s up there and you just wonder what kind of dang fool put him up there to begin with!”
    Obama was never really vetted by the adoring media, he has never had his nose bloodied in a real political fight as he perfected voting”present” to an art form, he has no real understanding or knowledge of the struggles of his countrymen, and he has had no real hard life experiences that are the hot steel needed to forge and shape leadership qualities.
    During the campaign when he made the comments about some Americans”clinging to their guns and God to a crowd of well-heeled San Francisco Democrats, it was almost as if he was giving them an anthropological lecture on the people of the rest of America. What he said demonstrated a total lack of understanding of his fellow citizens, but the way he said it was worse. It was as if he was saying, “You know I just returned from the hinterlands and I would like to tell you about the strange natives and their quaint customs I encountered in my travels.”
    And they wonder why healthcare is in trouble.

    There is also a growing perception about his being in over his head and that his inexperience, once seen as a not being a problem by his admirers, has become a problem.

    But Obama appears to enjoy BEING President–throwing out the first pitch of the baseball season, cracking jokes at the White House Correspondents Dinner and having NASCAR Day at the White House. The more important question is does he really know how to BE President.
    Well over the next few months we are about to find out. His healthcare plan is in deep trouble, the economy has too much”whoa” and not enough”giddyup”, and critical foreign policy questions will need to be answered on Afghanistan, Iraq and Iran to name just a few.

    He is either going to stand up and grab the standard of leadership or he will show that he really is a “post turtle” after all.

    The days of fancy speeches and adoring rallies are over. The American people have been aroused from their infatuation and will now be judging him on cold hard facts not his rhetorical flourishes. It’s about to get very interesting.

    As Obama’s hero old Abe Lincoln said,”You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time”.
    And the American people are showing they ain’t no fools.

  48. http://www.foxnews.com/politics/2009/08/28/hold-breath-epa-expected-declare-carbon-dioxide-pollutant/

    Well folks, is this the straw that will break the camels back? The march to socialism is happening fast these days. Hope Ya’ll got your supplies ready, I think we’re gonna need them much sooner than I anticipated.

    G!

  49. Healthcare reform bill = loss of privacy
    Jim Brown – OneNewsNow – 8/28/2009 7:00:00 AMBookmark and Share

    healthcare bill 2 bigA free-market think tank is warning that the House healthcare bill could potentially give thousands of federal employees access to citizens’ financial records.

    The House healthcare bill, H.R. 3200, expressly gives the new Health Choices Commissioner the right to look at an individual’s tax return to determine what medical benefits or subsidies that person qualifies for. Section 431 of the bill allows the new commissioner to view individuals’ filing status, adjusted gross income, number of dependents, and tax credits taken.

    Tom Giovanetti with the Institute for Policy Innovation says there are egregious violations of privacy in the draft legislation.

    “A lot of people who are concerned about privacy, they’re concerned about privacy from corporations. They’re worried about things like browser cookies….And our point here is that what we really ought to be concerned about is privacy from government,” he suggests. “Hewlett Packard can’t knock my door in, handcuff me, and carry my child away; but the federal government can do that. It does have that kind of power.”

    Tom Giovanetti (IPI)Giovanetti calls it a “top-down, government-knows-all approach.”

    “So, it’s for the government to decide who qualifies for what and who needs what assistance. So to make those decisions, they’ve got to find out all sorts of details about your finances,” he points out. “There’s another provision in the bill that gives them the right to look at your Social Security records. They’ll be able to look and see what your Social Security benefits are. They’ll be able to look and see how much you’ve paid in.”

    According to Giovanetti, a companion bill in the Senate leaves open the possibility that the new government Health Choices Commission would have the ability to look into a person’s bank accounts to view the account balance at the time of medical service to determine whether he or she has the ability to pay.

  50. ObamaCare out of touch with U.S. physicians
    Jim Brown – OneNewsNow – 8/28/2009 7:20:00 AMBookmark and Share

    A new poll finds that despite the American Medical Association’s support for President Obama’s healthcare plan, most specialty doctors strongly oppose the plan.

    medical doctors checkupThe American Society of Medical Doctors has released a poll of physicians that finds 86 percent of specialty doctors believe that the American Medical Association has become too political and has lost touch with the doctors it represents.

    The American Medical Association, or AMA, which gave Democratic Senator Ted Kennedy its highest award for public service earlier this year, has endorsed President Obama’s government-run healthcare plan. Seventy percent of the specialty doctors surveyed in the poll said they oppose current congressional and White House proposals for healthcare reform.

    Jean Card, a spokeswoman for the American Society of Medical Doctors, says the polling shows that many doctors fear President Obama’s healthcare plan threatens their ability to honor the Hippocratic Oath.

    “If you can’t live up to your oath, if you feel like this bureaucracy and this clumsy government system is in between you and your patient, well then a doctor thinks ‘No, I have to go with my oath, and if I have to say no to government to follow my oath, then I will,'” she says.

    The poll released by the American Society of Medical Doctors also found that 66 percent of specialty physicians believe that a government-run health insurance plan would restrict doctors’ ability to give the best advice and offer the best possible care to their patients.

  51. Black Flag says:

    Watching TV… about Medicare…

    “Boy, if we knew what primary care was important for our patients…we would use it!”

    Of course, they’ve removed the pricing mechanism of the free market – and now, they are completely lost….

    All I could do was shake my head at the stupidity….

    • Black Flag says:

      As long as the medical industry believes that they are, for whatever bizarre reason, not the same as any other economic good or service, they will continue to react like economic idiots

  52. Black Flag says:

    Worth repeating

  53. Black Flag says:

    http://www.businessinsider.com/chart-of-the-day-you-should-have-gone-into-the-federal-government-2009-8

    …and now you know why the government grows without constraint – higher pay attracts more employees and without an economic measure or discipline – there is no way to know if there are too many, too few, overpaid or underpaid –

    therefore the default will be too many over paid….

  54. Chris Devine says:

    • I have no faith in Barney Frank or the rest of them to fix anything.

      This is why.

      Peace Chris, hope today finds you and your family well!

      G!

      • Chris Devine says:

        If you consider that to be in-depth reporting (offering two word quotes without citing the source and cherry-picking video clips) I don’t know what to say.

        BTW, who are you referring to when you say “the rest of them?”

        • The rest of them applies to our worthless elected officials. IMHO, they have forgotten why they were elected, they aren’t listening to those that elected them and haven’t for along time.

          Hope your day is going well Chris, cool and wet here.

          G!

      • Black Flag says:

        I, too, will be surprised if the house does pass the bill.

        It would mean the end of FED.

        The People would finally get a glimpse of the utter perversion that the system has placed upon them.

        Oct. is not a good month – it is the month that most financial collapses occurs; for a reason – it comes after the reckoning of the summer quarter.

        • BF, I saw something about this yesterday, and today it’s on zerohedge. Is this as ominous as it sounds to me?
          ……………………………………………………………………………………………..
          China’s SOEs May Terminate Commodities Contracts

          08-28 22:37 Caijing comments( 0 )

          Any such move would be a major blow to investment banks which service commodities hedging operations for Chinese SOEs on the international market.

          (Caijing.com.cn) China’s state-owned enterprises may unilaterally terminate commodities contracts as they try to cut massive losses from financial derivatives, an industry source told Caijing on August 28.

          According to the source, China’s State-owned Assets Supervision and Administration Commission (SASAC) has sent notice to six foreign financial institutions informing them that several state-owned enterprise will reserve the right to default on commodities contracts signed with those institutions.

          Keith Noyes, an official with the International Swaps and Derivatives Association, a trade organization, confirmed that he is aware of the SASAC letter, but provided no further comment.

          Foreign brokerages usually work through their Hong Kong operations to sign over-the-counter derivative hedging contracts, according to an investment banker whose firm is involved in the business. Hong Kong and Singapore usually serve as venues for arbitration over such transactions.

          Most investment banks may “just swallow” any losses arising from canceled contracts, the executive said, adding that any losses are usually made up for with compensating trades.

          Investment banks “just earn less” from such transactions, he said.

          But any such move would be a major blow to investment banks which service massive commodities hedging operations for Chinese SOEs on the international market, said the executive.

          Chinese SOEs have suffered massive losses from hedging contracts since the onset of the global financial crisis. SASAC and the National Auditing Office has been investigating derivatives positions trading since the beginning of the year.

          A source from a state-owned company told Caijing that most of China’s SOEs engaging in foreign exchange and international trade have participated in derivatives trading, involving capital topping 1 trillion yuan.

  55. Pretty cool post. I just came by your blog and wanted to say that I have really enjoyed browsing your posts.

    Any way I’ll be subscribing to your feed and I hope you post again soon!

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