28. April 2009 by David A. Peterson.

Sometime in the near future…

On January 20th, 2012 the Republican controlled U.S. House and Senate prepares to bring criminal charges against all members of the Obama Administration’s economic team including the President and the Democratic leadership of The Congress.

The charge… Economic terrorism and the economic sabotage of the U.S. economy.

I completely get that  a very small minority of people in our country consider what the Bush Administration did to the detainees was torture and maybe even criminal. After all this small minority is the exact group who thinks the U.S. brought 9/11 on itself. This is the same group that believes if we just worked with these fringe terrorist groups instead of working against them we could all live in peace.

I may get it but I certainly don’t agree with it. I’m going out on a limb here but I would assume that everyone reading this post thinks that this small minority of U.S. citizens is dead wrong, maybe even a little bit crazy - but we all respect their right to have an opinion.

I have written before that President Obama appears to be the “idea man” not really the actual leader of the country. This torture debate is another perfect example. Instead of leading the President is allowing this small minority the ability to rewrite how future administrations treat previous administrations.

We are moving right past the point of rewriting history. The history isn’t being challenged. In this case the terrorist were real. The terrorist really did kill 3,000 Americans on one day. The terrorist were not being challenged and were not kept in check by previous U.S. administrations or by any of our world governmental bodies.

As a result the terrorist were allowed to flourish and allowed to carry out a world wide military campaign. History is not being rewritten - all of this happened in a span of about 10 years. What is being rewritten is the fact that if an administration creates a policy that is not popular by any number of citizens, however small or large that group may be, then lawyers and not historians will be employed to put the issue into its correct context.

Unfortunately “correct context” really depends on who is writing the history.

What you are seeing from President Obama is exactly what leaders of third world countries do. They do not accept that they have been elected as leaders, as the face of entire nations, as the heads of nations that are expected to be in world leadership positions 1,000 years from now.

In essence President Obama is scared to lead, just like President Asif ali Zardari of Pakistan is scared to fight the Taliban, Obama is scared to take on the extreme leftest members of his party.

By not leading he is setting himself up for defeat. Unfortunately he is setting the country back as well. We will become a country that looks at disagreements on policy as disagreements of law. Unfortunately he is legitimizing a new policy of disagreements being be settled by the courts instead of by elections.

President Bush was reelected to keep American safe. His policies were certainly controversial but at that time a little more than 1/2 of the country agreed that it was the correct policy. Given the 2004 circumstances, given that the Iraqi war was not going well he was STILL reelected.

The Bush Administration checked the U.S. laws on the subject of what constituted torture. They examined and then reexamined again to see if they were within the law with respect to the policy. They did not see this as “torture” and just to make sure the inmates would not be harmed they had medical personnel standing by.

During his tenure as President the Democratic leadership in the U.S. House and Senate were aware of the “torture” policies. At the time these Democratic leaders also thought that these measures were within the law.  At that time they decided that America’s citizens as a whole were more important than these few individuals being kept awake for days-on-end.

That same Democratic leadership may be talking a different game today but documentation will eventually bear out and show that they approved of the “torture.” 

Regardless if you believe in the torture policies, if these policies saved lives, if you believe the policies are reprehensible, or if you believe this wasn’t torture at all, the policy was made by and approved by an ELECTED representative government that believed it was acting within the law.

To go back and rewrite history, to now call it criminal… there will be no end to that type of thinking in the future. The United States needs a leader right now before this stuff gets out of hand.

Sometime in the near future…

On January 20th, 2012 the Republican controlled U.S. House and Senate prepares to bring criminal charges against all members of the Obama Administration’s economic team including the President and the Democratic leadership of The Congress.

The charge… Economic terrorism and the economic sabotage of the U.S. economy.

Posted in Issues | No Comments »

22. April 2009 by David A. Peterson.

Over the past few months since our banking crisis began we have been hearing a lot about nationalizing our banking system.

The government has repeatedly said that it does not want to go down that road, yet with the infusion of TARP dollars into selected banks the possibility of nationalizing a few of them now seems like a reality. Once the TARP funds move out of preferred stock into common stock then the nationalization of those selected banks will be complete.

Here is another way to look at it… once they government owns the common stock they then have voting rights in those corporations. The difference between them owning stock and you and I owning stock is that when you infuse billions of dollars into common stock you have lots and lots of votes. In other words you basically have the control of that bank.

But are we not in a banking crisis? Shouldn’t someone take control?

The government has two choices with unstable banks they can go the FDIC method which has been our traditional route since the 1930s or they can do a new method which is recapitalization.

The FDIC method of handling a failed bank basically pays off the depositors and then sells whatever is left to whoever will buy it. The control of the institution goes to another bank that steps in to purchase the assets.

The 2nd and newer method is called ”recapitalization.” Our new method began last fall with the Trouble Asset Relief Program or TARP. This new method of giving selected banks more capital to shore up their balance sheets kept some of these institutions from failing. I said “some” because some banks didn’t want the new capital but were persuaded to take it anyways.

I don’t think that during the crisis last fall the object was to ultimately purchase the common stock of these selected banks - but wouldn’t you know, once the Democrats were taught what this could actually mean to them they jumped at the chance to gain control. By buying the common stock and gaining control our government is now in the banking business.

Now why is that bad? If you trust your government then this should be no big deal. Get in, get out. Stabilize the institution, earn a few dollars in dividends while you’re at and then get out of the banking business.

But if the government has control why not stay in the business? After all isn’t government good?

Here is my take on this: Government Is Good- Politics Are Bad!

The politics of the situation can and will lead to very bad government. The fraud that can and will happen will outpace anything we have seen in the past.

Why? How can I be so sure? Let’s take a look at exactly what a bank does for a living.

A bank lends money. Not only do they lend money but they lend more than they take in. So if you deposit $1 into a savings account the bank will take that $1 and make $4, $6, or even $32 dollars worth of loans. Depending on the banking regulations at the time the bank actually CREATES money. They CREATE money by taking $1 and turning it into $4! Government regulators tell them how much risk they can take on. It is the government that tells them “today you can take $1 and lend out $4.”

Can you see why your congressman, why any congressman would want control over a money machine? Currently your government takes in a tremendous amount of tax dollars. Literally trillions of dollars but they can only SPEND what they take in and then they BORROW additional money to cover the government’s expenses.

But a bank, oh a big beautiful bank. You could take the $3 trillion dollars and turn it into $12 trillion dollars just by depositing that money into a bank that you happen to own.

Now for the politics: Let’s say that the New York Congressional Delegation needs $100 million for new schools for it’s cities. Because of the recession the cities have no additional tax revenues to pay for the schools and they can’t float new bonds due to their own crappy credit rating. So the school district asks their congressional delegation for help.

The next step is Congress will give whichever bank will help the school district in question an additional $25 million. The bank can then loan that $25 million dollars to whoever they want, many times over. Naturally they will loan it to the local school district. Who cares  if the school district defaults on the $100 million it borrowed, it only cost the taxpayer $25 million.

Oh what a mess.

So what is the chance this scenario doesn’t happen? What is the chance that these money making machines don’t stay nationalized with the Democrats in charge? What is the chance the bank presidents don’t make the loans to the risky school district or to whomever the congress wants them to lend?

If you saw the Congressional hearing over the past few weeks, those hearing where the bank presidents were beat to a pulp for the whole world to see… what is the chance those presidents don’t make those bad loans?

Welcome to the nationalization of our banking system. You don’t have to nationalize all of the banks to create a money machine. You just need a few big ones.

Can anyone tell me what the inflation rate in Zimbabwe is today?

Posted in Economics | No Comments »