Congress TRASHES the Constitution and Economic Recovery

Discussion in 'Economics' started by sandygray66, Mar 22, 2009.

  1. This commentary very accurately summarizes all the damage that congress is doing (especially the House) in their populist clamor to deflect blame and attention from the real problems and solutions.


    With the sanctity of contract abrogated, a decent idea in TALF has few subscribers thanks to Congress.

    TALF was the Fed's response to the Paulson bastardization of the TARP when Paulson opted to give banks billions versus buy bad assets, or at least considered bad due to the required mark to market accounting rules. Recall that LIBOR was falling until Paulson's ploy. The Fed had to step in to do something to start the credit thaw again. It worked as the Fed was going directly to mortgages, small business loans, credit debt, etc.

    Wednesday the Fed stepped up the game, putting TALF in bold letters with its extra $1.1T for buys of mortgage backed securities and indeed direct purchases of US treasuries, all under TALF.

    To this point, however, something in the neighborhood of 3 15 private institutions have signed on with dozens and dozens saying they will absolutely not participate and others under TARP saying they will pay back the TARP money and get out from under the tarp as soon as possible.

    Why? Because the sanctity of contract and the basic rule of law the US is known for is broken. With the actions of Congress this past week where it violated multiple sections of the Constitution with its punitive 90% tax on workers that had contracted for these bonuses and would receive them IF they stayed on and helped cut the losses of AIG in half. They did just that but are now getting burned at the stake. The law the House passed is a constitutionally prohibited Bill of Attainder. It is a prohibited ex-post facto law. It abrogates legal contracts that are not against public policy and were in fact approved by Congress. The law also violates equal protection in singling out a specific group and goes a step further with calls by the socialist Barney Frank to publish the names of the recipients. If one of those people is hurt it is on Frank's head.

    There is confusion as to whether the 90% limitation would even apply to TALF, so much so that CNBC called the Fed to ask if it did. The senior economic reporter had to be put on hold, and when that happened he realized it didn't matter what the answer was. Why? Because with Congress willing to pass laws that retroactively single out and punish one group it would be nothing for the answer to change from a 'no' to a 'yes' when convenient for Congress.

    The perception in the private sector is the government is a loose cannon that will pass whatever 'law' it wants at the moment without any constitutional considerations. With that hanging out there no one is signing up for the TALF if there is any possible way to avoid it. Thus a relatively decent idea (given the position the Fed is placed in) has the look of failure even before it gets off the ground.

    Fed really steps up the gambit, but the Administration and the Congress give it no choice.

    THE PROBLEM: We all know what the Fed did Wednesday, i.e. making bold never been done before Treasury purchases. Why was it compelled to add another $1.2T into the trillions already in the kitty even before TALF has really kicked off?

    First, there is NO plan, YET, from Treasury with respect to the bank bailout. With no appointees to help out Geithner hammer one out, the Fed realizes that no real plan is coming. There is talk of a 'private/public' partnership to get the job done, but as discussed above and more below, the private side has no interest in participating given what the federal government is doing.

    Second, Congress is out of control, governing by vendetta or the feud versus truly tackling the problems of overspending, by trillions, in areas far, far removed from its constitutional authority. Ex-post facto laws, bills of attainder, violations of equal protection, all banned by the Constitution, are getting overwhelming support by House reps. Congress is using the Constitution as a liner for the bottom of the bird cage as it abrogates contract law and shreds the Bill of Rights in case anyone wants to call them on it.

    So the Fed, realizing Washington is broken and won't be able to fix this problem or any others, is trying to get the public/private melding on its own by expanding TALF over $1T on Wednesday. No big mystery. Congress is off on a $165M witch hunt while it authorizes trillions in spending and the likes of Schumer chide those complaining of a 'measly' $2B in earmarks. The bonuses, while unsavory, are not the problem. As President Reagan noted and as is so painfully clear once more, the problem is out of control government. I never thought I would witness what I saw this past week in Congress, and what I saw was truly disturbing.

    THE RUB. The Fed's dilemma is the same as the problem that prompted it to act. Because Congress is constitutionally AWOL from its duty to uphold the Constitution it is not getting the private participation needed to make the plan work, i.e. get the money out in the market and getting it loaned out. After all, how can any elected official tasked under oath with upholding the Constitution pass an $800B spending bill without reading it? Any congressman that voted for the bill without reading it should be recalled or impeached immediately for failing to uphold their primary sworn duty of holding office. Period. The end.

    The result is that no private entity is willingly participating in TALF. All companies in TARP want out as soon as they can get out. Why? They don't want the government on their necks or attacking them after the fact with more bills of attainder or ex post facto laws. Businesses need to conduct business in these very difficult times with the best employees they can attract and not have government calling them to hearings if they pay bonuses to good honest works for doing the job the bonus was contracted for. What has happened is a travesty on all sides, but mountains of government oversight (there I go again) is not the answer. Many congressional leaders cannot even pay their taxes correctly (no surprise given the tax law) or keep budgets in line so what do they know about operating businesses?

    So, those not in are not getting in and those that are in are getting out. That means they are not going to take part in the facilities and thus the government money will not get disseminated through the country and credit markets. That means failure, despite all of the insanely spendthrift (another oxymoron?) ways of Congress and the Administration. Congress has driven away the private sector with its witch hunts designed to distract us all from its poor performance. No one can blame the private sector for hunkering down and just trying to survive until different winds start blowing.

    Unless there is some different route taken it is hard to see the economy getting much better and indeed it without credit getting fixed it will not get better. Sweeping tax incentives for investing in the US are needed. Not just money giveaways that are squirreled away, but incentives that say 'use it or don't get it.' Then it will be used and the money will get into the economy. Instead we are taxing money from businesses and individuals, sending it to Washington, and Washington is sending it back to the states (after taking its hefty 50% cut for overhead and favorite federal spending programs) to spend on museums and Frisbee parks. Sure there are some roads and bridges, but that is a small part of the bill. Most of this is a preparation for federalization of many extra-constitutional matters and not stimulus.

    We need to reward risk taking to start businesses and to invest in America. Instead Congress and the Administration are working to punish those trying to put risk capital into play and create profitable businesses. Thus the money won't be spent and there is no help to the economy. It is a bleak picture unless things change significantly, but alas, because the powers that be are motivated by social restructuring it is not going to change course. The economy may improve some, but it will not surge and grow as it did in the early 1960's, the 1980's and 1990's, and again after the 2003 investment tax cuts. Of course, if no one participates we suppose Congress could pass a law forcing them to do so or get fined or taxed even more . . .
  2. Great article.
  3. Agreed 100%
  4. I'm really pissed off right now about what's happening in Washington. In the past few months my beliefs about this country have been shattered. The things I learned in business school and economics are now treated in the media and by policy makers as falsehoods. It seems like we have entered an alternate reality where ignorance and idiocracy rule the day. How can the people of this country go any further with the current government that is in place? The system is failing and the more congress pushes, the closer we get to the break point.

    What's the most disgusting thing about the way things are is the false language used. Congress is not being populist. They are inventing issues, that they think are populist. How many people here give a shit about a couple hundred million in bonuses to AIG when we just saw them get 150 billion which was laundered to overseas banks? Congress is bowing down to the corporate interests that rule washington politics. They pass these bullshit bonus bills to distract attention from what's really going on; Massive money laundering from the public sector to the corporate balance sheets.
  5. Daal


    People are too scared of defending bonuses based on constitutional grounds. They rather live like hacks with their opinions being whatever pleases the public and gets the most applause, its sickening
  6. The main attack on the constitution started in 2001 with the Bush republicans, now it's the democrats turn, this is small potatoes though, and I have no sympathy for the AIG millionaires. There are thousands of laws and actions of congress and our presidents and businesses past and present that are unfair and this is at the bottom of the list that worries me. And it may be beneficial, maybe it will put the fear of god into some of the crocked businessmen out there. It's good to have a cause but this cause, fighting for AIG, isn't on the list of worthy causes.
  7. Breaking the very foundation that supports this country - the concept of rule of law (especially contract law which goes back to the Magna Carta), rather than the rule of whoever's in power at the time - is a much bigger transgression than anything done during the Bush administration which was focused towards suspected terrorists (and I don't support breaking the Constitution in those areas either).

    If those of us who make-up the economic engine of this country do not see that the rule of law will be enforced, but instead are subject to the whims of whichever boneheads are currently elected to Congress, then the economic engine in this country will die. Doers will either leave to lands of better opportunity, or will give up being doers.

    As much as I disagree with the magnitude of these AIG bonuses (and any large sums going to executives of TARP recipients), I hope this 90% ex post facto taxation issue goes to Supreme Court and they act as the constitutional check & balance on this congress that they need to be.
  8. funny, i didn't know we even had a constitution any more after patriot act III


    I believe the Federal Reserve Act of 1913 is the Root Sole Cause Problem, and Responsbile for this mess.

    Greenspan leaves,}&siteid=mktw&dist=

    Change comes at a pace,
    Sept. 11 1991, Bush Sr. Speech,

    up until Sept.11 2001. W. Bush Jr.

    Jeb Bush, Florida Elections,

    Marvin Bush Head of Security for Twin Towers.

    Prescott Bush, (Grandpa Bush) WorldWar I-II

    "Prescott Bush was one of seven directors of the Union Banking Corporation, an investment bank controlled by the Thyssen family, which was seized in October 1942 under the Trading with the Enemy Act as being owned by "enemy aliens." The assets were held by the government for the duration of the war, then returned afterward."

    Outside of The Federal Reserve being the Root Cause problem.

    Who else, who should be held responsible.

    1. War Profiteers
    2. CFR (Counsel of Foriegn Relations)
    3. Rothchilds, any and all participants of CFR, FreeMasonary, Eastern Star, Other Groups not listed, directly related with an agenda, to create social harm,
    4. Congress
    5. Elected Members on this Train of Deciet
    6. Goldman Sachs, Which stand to benefit from the Entire AIG, Gov't Mess.
    7. Henry Paulson

    "Paulson's three immediate predecessors as CEO of Goldman Sachs — Jon Corzine, Stephen Friedman, and Robert Rubin — each left the company to serve in government: Corzine as a U.S. Senator (later Governor of New Jersey), Friedman as chairman of the National Economic Council (later chairman of the President's Foreign Intelligence Advisory Board) under President George W. Bush, and Rubin as both chairman of the NEC and later Treasury Secretary under President Bill Clinton." (above website)

    8. Morgan Stanley, which Proudly Reflects (CFR) on their Front webpage. Bottom Right Corner.

    My Question to all of you, is: What do we do?

    1. Civil War?
    2. Diplomacy through Court System, Various Laws,
    3. Form Groups, and empower them with action.
    4. New Movement? "Freedom Party"
    5. I believe a NEW WITCH Hunt should be Created, For anyone and everyone that has a Billion Dollars or more. Anyone who has made decisions that have not been in the interest of the American People.

    The True Terrorist are the ones that wage war on our way of life, not a race, or people that are half way around the world, that have never set foot on U.S. Soil. Inless they fall under the above mention groups,

    If history should be any lesson. We have choices available to us to fight the evil we face today.

    Conclusion, I have come to the point where I am FED up, with the actions, decisions that have taken place over the years, and

    I believe a LAW should be passed retro-active to hold these Criminals Responsible. Brought before a New Congress, and a New Senate, All Judges Step Down. Duty is over. Under everyone's Watch it is time for a New Era, with new Leadership.

    I also believe Washington District of Colombia, Should be a Museum, and a part of our History, and A new location with a new smaller form of government to take shape.

    I am open, to feedback,
    I am open to change,
    I am open to seeking out the traitors where ever they hide.

    People who stand up aganist this ongoing greed, and control of the masses, have been shot and or killed in the name of humanity. JFK, MLK, and many others.

    JCBLESS Formed in 1921

    8 years. Timeline is very important, events, that have shaped history for the worse. Evil cannot hide it's trail.

    Federal Reserve Act 1913

    Read above see who are all invovled.

    Read their content. This is what they are about.

    "Speaking at CFR, U.S. Federal Reserve Chairman Ben S. Bernanke urged an overhaul of U.S. financial regulation that might translate to added oversight authority for the Fed." (above website)
    #10     Mar 22, 2009