Barney Frank Wants to Set Pay Levels

The House Financial Services Committee Chairman Barney Frank, Democrat from Massachusetts, has approved legislation (Pay for Performance Act of 2009) that would give Treasury Secretary and Turbo-Tax Cheat Timothy Geithner, draconian control over salaries of employees who work for businesses that received bailout funds from the federal government.

Harmless, right? After all, if they received "taxpayer" money then shouldn't we have a say in what these people make for a living? Uh..., "NO!" What qualifies Barney Frank and Turbo-Tax Cheat Timothy Geithner to determine what pay is unreasonable or excessive among private, non-government businesses? What qualifies them to judge the performance of any employee at any company? Are they going to giving performance reviews, hiring and firing, too? Is there no line that these ass-clowns won't cross?

A couple of points. First of all, these are supposedly "loans" to these companies, meaning that the government is expecting to get paid back. So it's not really a handout, if it's a loan, right? Or, does the government really intend for these "loans" to truly be handouts, kind of like the kind of loan a parent gives their 50 year-old deadbeat kid that still lives in the basement? The government is, in essence, acting as a banker to the bankers (and other firms).

Do you know any other bank that would micro-manage a lending customer in such an intrusive manner? Like, "I lent you money, therefore, I get to set the salaries of your employees. I know more about your business than you do. I know how much each of your employees is worth, and you don't." These people have a serious case of Napoleon complex.

Secondly, the government forced several of these institutions to take the money because if only the weak companies received the money, it would potentially cause people to panic, resulting in a "run on the bank."

The bailouts were wrong to begin with, but allowing the government to determine the payroll of private businesses is a major abuse of their power. We are giving power over the private economy to the federal government at an alarming rate. The degree of government intrusion, in almost all areas of life, is completely out-of-control. The government has officially run amok.

This certainly is not capitalism. It may be socialism; it may be fascism; it may be communism, but it is not free markets, free enterprise, or a free society any longer. If anyone's pay is excessive, it's the bumbling, bureaucratic bums in Washington, D.C.

>Video: Glenn Beck yells at Connecticut AG for 11 minutes over AIG bonuses<

The Audacity of Sacrifice. The Audacity of "Nope"

At this time, when many Americans are already intimately familiar with the term,"sacrifice" (maybe too much so), our President has the "audacity" to request that we sacrifice for the good of the country. It is no long the message of, as in his book, "The Audacity of Hope." It's more like, whatever your heart desires, just say, "Nope!":

"I'm asking you for your good and for your Nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel. Every act of energy conservation like this is more than just common sense -- I tell you it is an act of patriotism."

"Our Nation must be fair to the poorest among us, so we will increase aid to needy Americans to cope with rising energy prices. We often think of conservation only in terms of sacrifice. In fact, it is the most painless and immediate way of rebuilding our Nation's strength. Every gallon of oil each one of us saves is a new form of production. It gives us more freedom, more confidence, that much more control over our own lives."

"I do not promise you that this struggle for freedom will be easy. I do not promise a quick way out of our Nation's problems, when the truth is that the only way out is an all-out effort. What I do promise you is that I will lead our fight, and I will enforce fairness in our struggle, and I will ensure honesty. And above all, I will act."

"We can manage the short-term shortages more effectively and we will, but there are no short-term solutions to our long-range problems. There is simply no way to avoid sacrifice."

GOTCHA! I guess I forgot to mention which president said the above words. The words were spoken by not the 44th Teleprompter of the United States. Oh no! These were from Jimmy Carter's "Malaise" speech, July 15th, 1979. TRICKED YA! You thought that another liberal icon, Barack Obama, had spoken those feel-good words, didn't you?

I think it would be wise to rediscover the word, "sacrifice." A sacrifice is simply the surrender of something of value. And full sacrifice is full surrender of everything you own of value. To achieve the full virtue of sacrifice, you must not seek any return gratification for your sacrifice. Any return of gain eliminates the virtue of sacrifice.

If you achieve the career you want after years of schooling, training, and hard work, it is not sacrifice. If you give up that career for the sake of a stranger, who doesn't deserve it, it is. If you give someone a penny for a dollar, it's not a sacrifice. If you do the opposite, it is. Sacrifice doesn't mean refusing what is evil for what is good, but what is good for what is evil.

Now how do you feel about "change" or Obama's "sacrifice"? We are being set-up!

Sacrifice is when the government takes money from one person who earned it (under the ultimate threat of imprisonment), and redistributes it to another person who didn't earn it.

I have some news for the current President. "Sacrifice" will not jump start the economy. It will not increase demand for our products or automobiles. It will not create American jobs, and it will not improve investor confidence. Sacrifice does not inspire creativity. Nor does it spawn ingenuity or excellence.

There is only one thing that will turn the economy, and it has zero to do with the government, which is why he's against it. It's called good ole' free market capitalism, and no, it's not what caused the current mess. Government caused the current economic collapse, but you will never hear them admit it. Doing so would truly sacrifice the power over us that they currently enjoy.

Would You Buy a Car From Barney Frank?

The CEO of General Motors (GM), Rick Wagoner, has resigned at the request of President Barack Obama. The absurdity of the Teleprompter of the United States, intervening in the removal of an American CEO of a private business, is beyond imagination.

Who is he going to replace Wagoner with, Barney Frank? Would you buy a car from Barney Frank? Would you even consider buying a General Motors car if that company is managed by the federal government bureaucrats, in the same type of efficiency, innovation, and execution that gave us Welfare, Medicare, Medicaid, Social Security, HUD, Fannie Mae, Freddie Mac, IRS, and the Community Reinvestment Act? Have you noticed that the federal government has NEVER profitably managed any enterprise? Not even government-mandated monopolies like the United States Postal Service!

This is not an appropriate use of what is supposed to be, "limited-government." If it wasn't 100% apparent, then it should be now. The government never should have bailed out the car companies. Violating free-market principles is like denying gravity. You cannot reward failure with tax-funded cash infusions and expect market improvement in the private industry. The risk of failure is a motivating factor that keeps companies thriving to perform. Taking away that motivation guarantees mediocrity at best and continued failure at worse.

Senator Jim DeMint, Republican from South Carolina, said in December of last year, "This is what happens when you bail out one industry: five more get in line. Some auto manufacturers are struggling because of a bad business structure with high unionized labor costs and burdensome federal regulations. Taxpayers did not create these problems and they should not be forced to pay for them."

And as bad, or incompetent, as GM management may or may not have been, this we know to be true. Government does not have the answer to the problems of the American Automobile Industry, and it never will. It may have been, and probably was, part of the problem. It will not be part of the solution.

When is enough, enough?

Obama: Delusional, Deceitful, Disgraceful, Deficit Drunk

President Obama's budget is a national disgrace. Despite all of the deficit-cutting malarkey, the budget is nothing but a return to the "tax-and-spend" (over-tax & deficit-spend) Democrat policies remniscent of Lyndon Johnson's Great Society. One day he's spending like a drunken comrade, and the next day he's bragging about cutting the deficit in half. He's like a delusional, political box of chocolates...you never know what you're going to get.

While he was elected on the promise of "hope-and-change," he's governed more like he's on dope and is deranged. One sentence, he's playing the blame game, pulling out his favorite whippin' boy, G.W., saying, "Let me remind you that I inherited this deficit." Then, in almost the next breath, he's proposing a budget of $3.6 trillion dollars! Is he drunk? Did G.W. leave an unopened bottle of "Jack" in the presidential desk?

President Bush, who ran deficits averaging around $300 billion annually, was roundly criticized by Candidate Obama for his budget deficits, but now that he's President, he's going to at minimum double, but realistically triple-down on Bush's deficits, even after the troops from Iraq come home (if they do). The new liberal logic of Obama's punch-drunk supporters, looks like this:

George W. Bush's Deficits = Bad

Barack Obama's Deficits = Good

Obama is so arrogant, that he thinks his deficits don't stink!

It's very apparent that his words are meaningless. They're only words, letters devoid of significance or attachment to reality. They are empty utterances, tongued by teleprompter, to tickle the targeted ear towards tyranny. Truth? There is no truth. Only power. His power. His control. His party. Your money. His blind, mind-numb robotic followers.

In this New Era of Responsibility, finally someone is holding the President accountable. Lord knows, the mainstream media sure isn't going to. Judd Gregg (Rep.-N.H), the previous Commerce Secretary nominee, who provided the Republican response to President Obama's radio address on Saturday, hammered home the lunacy of Obama's gargantuan budget deficits:

"To say this another way, if you take all the debt of our country run up by all of our presidents from George Washington through George W. Bush, the total debt over all those 200-plus years since we started as a nation, it is President Obama's plan to double that debt in just the first five years that he is in office."

"He is also planning to spend more on the government as a percentage of our economy than at any time since World War II."

"His budget assumes the deficit will average $1 trillion dollars every year for the next 10 years and will add well over $9 trillion dollars in new debts to our children's backs."

"He also is proposing the largest tax increase in history, much of it aimed at taxing small business people who have been, over the years, the best job creators in our economy."

"And further, he is proposing a massive new national sales tax on your electric bill. So that every time you turn on a light switch, in your house, you will be hit with a new tax -- and it averages over $3,000 per
household."

"These are staggering numbers and represent an extraordinary move of our government to the left."

I'm nauseated by the people crying, "Just give him (the President) a chance." In less than three months, the 44th President has proposed budget deficits greater than the 43 behind him -- COMBINED!

Please feel free to chime in below. Do you think the President is, in regards to his $3.6 trillion budget:

a) Drunk, b) Delusional, c) Deceitful, or d) Disgraceful?

The Loophole to Tyranny. Government Wants More Power Over Private Businesses

To borrow a phrase from P. J. O’Rourke, "Bringing the government in to run Wall Street is like saying, “Dad burned dinner, let’s get the dog to cook." The federal government, in their eternal wisdom, not wanting to admit their folly in causing the current credit crisis, have requested to give confirmed tax-cheat and Treasury Secretary, Timothy Geithner, unprecedented, over-reaching, new powers. This is a loophole to tyranny.

In another "Big Brother," tyrannical power-grab by the Obama Administration, "Turbo-Tax" Timothy Geithner, who is not even capable of doing his own tax return using the popular personal tax preparation software known for it's "idiot-proof" ease of usage, requests that he be able to take-over private "non-bank" businesses he deems to be a threat to the overall economy, however he defines it. I've been saying this a lot lately, but it bares repeating, "What country do I live in again?"

Do they really think we're gullible enough to think that the likes of Barney Frank, Nancy Pelosi, Harry Reid, and Timothy Geithner, can plan, lead, innovate, and motivate American free-enterprise from high atop their respective perches in the nation's capital?

This administration has already made the word "bonus" a dirty word in the American vernacular. They also have found somewhere in the Constitution that one of the duties of the federal government is to tell private citizens how much money they can make...how much is "too-much." Over a certain amount, you're demonized as "greedy" or "selfish." Yet, hardly a word is spoken about the President's "bonus" of $500,000 he received just five days prior to taking office. What about his greed? Perhaps his money needs to get "redistributed".

This type of arrogant, despotic, crisis-management by pompous, poverty-pimping politicians in Washington, D. C., will drive another nail in freedom's coffin. The government setting wages in private industries, in the name of "fairness" and "equality," violates the economic freedoms and individual liberties brave men and women died for. It is not government's role to draw an arbitrary line in the economic sand that says, "Don't cross here."

Has anyone noticed that the government's solution to any problem is more government? More rules, more red-tape, more bureaucracy, more oversight, more laws, more agencies, more bureaucrats, more taxes. They kill the human spirit, stifle innovation, handcuff ingenuity, and take fluctuations in the economy and regulate them into deep, dark depressions, as in the 1930's. The current clowns in Washington, D.C., are making the same ill-conceived proposals that killed the economy then, and if allowed to, will kill this one.

Any government big enough to control an economy as big as the United States' economy is big enough to steal your freedom, no matter how pragmatic, caring, or persuasive their rhetoric may be.

EXPRESS YOUR FREEDOM BY SHARING YOUR COMMENTS BELOW, WHILE YOU STILL CAN:

"WHO IS JOHN GALT?", "GOING GALT", "ATLAS SHRUGGED", AND AYN RAND, MAKE HUGE COMEBACK SINCE OBAMA

"Who is John Galt?" "Going Galt," "Atlas Shrugged," and Ayn Rand are making a huge comeback since Barack Obama, and his teleprompter, were elected President of the United States. Atlas Shrugged, the classic, prophetic 1957 novel by Russian immigrant, Ayn Rand, has been soaring on the best seller charts. For several weeks Atlas Shrugged has been holding steady in the top 10 best-sellers in the broader United States Literature and Fiction category, and as of March 18th, various editions of the novel stand at #3, #5 and #6 in Amazon’s ranking. Across America, as fed-up taxpayers attend Tea Parties," in remembrance of the original Boston Tea Party, to protest their displeasure with our federal government, you'll see signs reading, "Who is John Galt," or "Go Galt," or "Going Galt," or "Atlas Shrugged".

John Galt, the main fictional character in the 1100 page, Atlas Shrugged, was an engineer who invented a new electric power technology that had earth-changing potential. But when the owners of his employer, Twentieth Century Motor Works, decided to run the company by the Marxist axiom, "From each according to his ability, to each according to his need," Galt forms a labor strike. But, instead of the typical blue-collar participants, it was the bosses, managers, employers, businessmen, and industrialists, the most economically productive risk-takers in society that went on strike. In essence, the minority that were paying the bills (taxes), holding up the world (Atlas), shrugged.

In a nutshell, the moral of the story is about over-reacting, "do-gooder”, politicians who repeatedly respond to crises, that in most cases they caused,by creating new government bureaucracies, programs, laws, regulations, andtaxes on the most productive. Of course, like the current government programs of Fannie Mae, Freddie Mac, Medicare, Medicaid, Social Security, Community Reinvestment Act, etc., these big government "solutions," turn out causing more harm than good (shocking, I know). To solve these newly created problems, the "caring" politicians create even more government programs, that have the unintended consequence of even more economic suffering, and the endless cycle continues.

Ring a bell?... Hello!

It's no wonder Atlas Shrugged is climbing the charts, 52 years from inception. The current economy, the big-government solutions to government-created problems, is right out of the book. In 1991, a survey by the Library of Congress and the Book of the Month Club rated as the second-most influential book in their lives, behind only the Holy Bible. One of the most best and most popular conservative political blogs on the internet today, not surprisingly, is Atlas Shrugs.

In John Galt's Speech, which encompasses over 90 pages, and reportedly took Ayn Rand two years to write, Galt explains:

"I am a trader. I earn what I get in trade for what I produce. I ask for nothing more or nothing less than what I earn. That is justice. I don't force anyone to trade with me; I only trade for mutual benefit. Force is the great evil that has no place in a rational world. One may never force another human to act against his/her judgment. If you deny a man's right to Reason, you must also deny your right to your own judgment. Yet you have allowed your world to be run by means of force, by men who claim that fear and joy are equal incentives, but that fear and force are more practical."

John Galt led the strikers, the captains of industry, against the "looters," the mob rule being imposed by the common man. This approximates the United States today, where 40% of eligible taxpayers pay none. They have figured out how to vote themselves pay raises by electing "charitable" politicians, like Barack Obama, who will "redistribute the wealth," from the "John Galts" of the world.

The disillusioned and disenfranchised "John Galts," or "Going Galt," signs at the present day Tea Parties, are making the point that the successful members of society will cut back on work in response to being punished and singled-out by the onerous tax code.

In a recent Wall Street Journal op-ed, Yaron Brook, executive director of the Ayn Rand Institute, entitled, "Is Rand Relevant," explained the parallels between Atlas Shrugged and today’s events:

“In Atlas Shrugged, Rand tells the story of the U.S. economy crumbling under the weight of crushing government interventions and regulations. Meanwhile, blaming greed and the free market, Washington responds with more controls that only deepen the crisis. Sound familiar?”

Brook also stressed the importance today of the book’s often overlooked message that capitalism cannot be properly defended without morally defending profit and self-interest:

“. . . only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism--and that as long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention--and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.”

Barack Obama's rhetoric and policies have declared war on Capitalism, success, prosperity, and wealth. If allowed to win, the economic carnage that results from the combined effect of "Going Galt," will not be pretty. A 52-year old book's climb to the top of the charts should be a warning sign to the nation.

Czech Prime Minister Calls Obama's Plans "Way to Hell."

Czech Prime Minister Mirek Topolanek, a top European Union politician, bashed President Obama's expanding budget deficit and protectionist trade measures, such as "Buy America," and said that "all of these steps, these combinations and permanency is the way to hell." Topolanek firmly stated that "the United States did not take the right path."

On Wednesday, Topolanek, whose country currently holds the EU presidency, told the European Parliament that President Barack Obama's stimulus and bailout schemes "will undermine the stability of the global financial market."

"We need to read the history books and the lessons of history and the biggest success of the (EU) is the refusal to go this way," he said. "Americans will need liquidity to finance all their measures and they will balance this with the sale of their bonds but this will undermine the stability of the global financial market," said Topolanek.

It's a pretty pathetic state of affairs when European socialists tell us that our United States Government is spending too much money! What friggin' country are we living in? Socialist countries are telling us we're too socialist?

This dovetails with Russian Prime Minister and former KGB Officer, Vladamir Putin's statements last month, when he said that the US should take a lesson from the pages of Russian history and not exercise “excessive intervention in economic activity and blind faith in the state’s omnipotence”. At the World Economic Forum in Davos, Switzerland, Putin warned, "In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.”

Former Communists are telling us how to be Capitalists? Does anyone see the irony here? How shamefully embarrassing! I thought Barack Obama was supposed to improve the rest of the world's opinion of the United States.

PLEASE COMMENT BELOW:

Dear AIG, I Quit!

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G. It ran in The New York Times’s op-ed section.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis

Turbo Tax Cheat Timothy Geithner's Plan is Toxic

Turbo Tax Cheat Timothy Geithner's plan is toxic for American taxpayers. It appears to be parallel to the same type of government interference with free markets that caused the mortgage crisis, credit crisis, and the complete loss of investor confidence.

Yesterday, as the plan was announced, the stock market roared in approval, to an almost 500 point rise in the Dow. I contend that it was the market applauding that there was a plan, not necessarily the validity, or content of the plan itself. Previously, the markets had tanked when the Treasury Secretary announced on February 10th his "non-plan-plan". After much build up by the Obama administration, Geither basically announced his plan by saying that he had none, but would get one soon. The market responded by dropping almost 5% in one day.

One thing the financial markets hate is uncertainty. They yearn to know what the rules of the game are going to be, so that they can price securities accordingly. As humans, we love certainty even if it's negative certainty. My take on the market's reaction to the Geithner plan was just that, a decrease in uncertainty.

There's something about the plan that doesn't sit right with me. It sounds an awful lot like what got us into the economic dumps we're in now. According to Forbes Magazine:

"The government has promoted bad loans not just through the stick of the CRA (Community Reinvestment Act) but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to "promote homeownership," not to apply sound lending standards."

In addition, the federal reserve artificially lowered interest rates much lower than they would be in a totally free market economy, making it even easier to obtain a mortgage, especially an adjustable rate mortgage with a one-year teaser rate.

In essence, isn't the Geithner plan similar to this:

• Government encourages loans (Subprime vs. Toxic Assets) that can't stand on their own in the free market.
  
• Government guarantees the loans (just like they did with Fannie and Freddie), effectively eliminating risk.
  
• Government securitizes the loans for sale to investors who buy them with leverage.

To me, it sounds like Geithner is trying to solve the rotten loans, with...more rotten loans, and using leverage, no less. The guarantees, like in the case of Freddie and Fannie, are on the taxpayer's back, so I hope we're not looking at the "here we go again" bailout phase to cover these "toxic" assets in a year or two, and lengthening, possibly even deepening, an already painful economic recession.

Free markets didn't cause the economic hardships we're in now, the government's "central-planners" did, and they're not using free markets to fix the mess either. The major theme to both of these systems is that the taxpayer is taking all of the risk. Aren't we supposed to learn from our mistakes, and not repeat them?

It amazes me that the market, in it's infinite wisdom, is attempting to adjust housing prices to somewhat more affordable levels, and the government is trying to artificially prop-up prices from declining more. If they let the prices decline, wouldn't this make housing more affordable, and wasn't that their altruistic goal in the first place? Haven't housing prices been so ridiculous that parents are concerned that their kids won't be able to ever afford their first home? Why doesn't the government just let prices correct themselves?

Because they have to be in control, that's why. They have to justify their existence by "solving" all of our problems, and by naively trying to legislate the end of market cycles. Of course, if and or when the plan clearly fails, the last thing the Barney Frank's of the world will blame is government intervention. Oh no, they'll say that the government didn't do enough to justify even more governmental tinkering. I'm afraid in this case, the medicine might cause more of the disease.

I hope I'm dead wrong about the Geithner Plan. I really do. But it just doesn't meet my smell test, and the government's track record of mucking things up is legendary, to say the least. Keep in mind that the plan was designed by a gentleman, who's so exceptionally brilliant, that he can't figure out how to do his own taxes using Turbo Tax. That should give you some hope, right?

Obama and Frank Make "Bonus" a Dirty Word...War on Wealth Continues

Did you just get offered a bonus from your company? How do you feel? Evil? Greedy? Sleazy? Dishonest? Guilty? The President and his buddies have added the word, "bonus," to their arsenal in the "War on Wealth." Barack Obama is making "Bonus" a dirty word, and so is Barney Frank. And, not just for evil AIG employees or other financial services firms that received bailout funds. Are you fearful of being ridiculed? Hide your head in shame!

What about your bonus if you happen to work for one of the big-three automobile manufacturers, who also received billions of "Obama-bucks"? What if you happen to work for Ford, GM, or Chrysler and were offered by "retention-bonus," to stay employed there. Let's say you're a key-employee, and are being heavily recruited by several of the foreign manufacturers. You've done nothing wrong, right? All you've done is work hard enough to be recognized for having enough importance to your company that management is willing to pay you a bonus for staying aboard. Does that make you a dirtbag? A criminal?

Politicians like the President, or Barney Frank have probably never put themselves in a position to earn a retention bonus. Many taxpayers would be willing to pay them to leave, but I digress.

Representative Barney Frank, D-Mass., recently grilled government appointed AIG CEO Edward Libby, for the names of the company's controversial bonus recipients. Libby's basic response was that he would comply under a subpoena, but was concerned about the employees privacy and "safety!" Frank responded that he couldn't guarantee that he'd keep the names confidential, but didn't address the safety issue. Safety? Are you kidding me? Just what was Fannie Frank going to do with these names. Hire hit-men? Give the names to the IRS with a sticky note on them saying, "Audit these guys?" What kind of harassment was he planning?

What laws did these employees break? Receiving a bonus a part of their binding employer/employee contractual agreement? Perhaps the toothless legislator from Massachusetts needs to be investigated for verbally threatening private citizens using the power of the federal government. Our public "servants" should not be allowed to harass and intimidate private citizens in this manner.

Why is the press not asking these questions to Representative "Fannie Mae" Frank. Both Frank's and Obama's shock and anger in regards to these bonuses is laughable anyway. AIG reportedly revealed the bonuses over one year ago, so it was no mystery and no surprise. Congress is targeting a small group of Americans with a 90% tax rate to cover-up their ineptitude.

There should be outrage over Barney Frank's disgusting tactics. Americans should not stand idly by while our constitutional rights and freedoms are being abused.

The word "bonus" is becoming a dirty word in the American culture, thanks to demagogues like Barney Frank and Barack Obama. The AIG bonuses have become another weapon of mass destruction in President Obama's "War on Wealth".

Why the AIG Bonus Tax is Unconstitutional

The AIG Bonus Tax is clearly unconstitutional, according to Article I, Section 9; Clause 3, which says: "No Bill of Attainder or ex post facto Law shall be passed." 

The Congress is attempting to use the tax code to condemn and punish a certain small group of citizens, retroactively, without due process, for political purposes. In fact, the targets, the recipients of the AIG bonuses, are not even being charged with a crime. They, Congress, have no legal basis to perform a "trial by legislature." They do not have the power to act as "judge and jury," effectively playing the role of the judicial branch, in an attempt to turn attention away from the fact that they were the ones that wrote the language, allowing the bonuses, in the first place. 

Congress is intentionally "majoring in minors," spending far too much attention on these bonuses, a point that was also made by Charles Krauthammer today:  

"It's less than one-tenth of 1 percent of the bailout money given to AIG alone. If Bill Gates were to pay these AIG bonuses every year for the next 100 years, he'd still be left with more than half his personal fortune."

Do you remember when Congress and the President were telling us that the several billions of dollars in the recent stimulus bill were only 1% of the total, and were insignificant?  Well, apparently 1/10th of one percent, and $165 million, is much more significant than 1%, or $7.7 billion, when it's needed to be by our current crop of hucksters in Washington, D.C.  To put it another way, if the AIG bailouts were $100, these bonuses would be about a dime.  The President and his henchmen are trying to get you to focus on the dime, because they just robbed you, the taxpayers of America (if you're one of the lucky 40%) for $99.90! Where should the emphasis be?  Where should the outrage be?  Where should the media attention be?

On Sunday, even Vice President Joe Biden's economic adviser told George Stephanopoulos, on This Week, that lawmakers' plan to tax back insurance giant American International Group, AIG, bonuses may have "gone too far."

Although these bonuses are understandably distasteful, given that the company had to be bailed-out, they are legal by form of contract. Someone receiving something that someone else thinks is distasteful, is not a valid legal reason to destroy a legal contract. Nor is it an opportunity to violate someone's freedom or rights. Our government, in a free society, is supposed to protect the legality of contracts, not violate the agreements themselves. 

Congress's attempt to make themselves look better by confiscating bonuses, that they approved, is a major breach of their powers and they must not be allowed to get away with it. Doing so would set a potentially disastrous and dangerous precedent, opening up the barn-door to all kinds of abuse of governmental powers.