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  • Morning Bell: Highway Robbery

    As a general principle, conservatives believe government should not intervene to protect those who have made poor business decisions — even if those decisions have been influenced by excessive government regulation. But there can be rare situations where the cumulative effect of many bad decisions in one sector of the economy can threaten everyone. In these rare cases, government has a critical role in keeping the market’s infrastructure functional. We are in such a situation today.

    Treasury Secretary Henry Paulson has presented Congress with an outline of an expensive and potentially costly package of proposals that he believes are necessary to solve the current crisis. As this outline becomes firmer, conservatives must be careful to balance their free market principles. Specifically, lawmakers should: not prop up failed or failing institutions; not prop up stock or housing prices above market levels; not allow the government to become the permanent owner of any assets; and require firms receiving aid to take a deep discount on their assets or pay a significant fee for receiving government assistance.

    Most pressing, conservatives must fight to make sure that any new action is narrowly confined to government’s market infrastructure role and does not unnecessarily increase risk to the American taxpayer. Already liberals in Congress are pushing to lard up any plan with their unrelated domestic spending priorities. The Politico reports that Democrats are trying to use Paulson’s plan to influence their “year-end spending bill that includes more than $36 billion in emergency appropriations to finance disaster aid, fuel assistance for the poor and loans for the auto industry.”

    Also according to Politico, liberal economist Dean Baker has been telling “congressional Democrats that Bush is the one who is in the delicate situation and would therefore be unlikely to veto whatever package Democrats send to him, as long as it gives Paulson some of what he needs.” Conservatives should not cave to such highway robbery.

    The most recent versions of Paulson’s plan already put $700 billion of taxpayer money at risk. There is no reason the American people should be forced to put another $25 billion at risk now, especially for an industry that has not learned from its past mistakes despite previous government bailouts.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    15 Responses to Morning Bell: Highway Robbery

    1. Ken Jarvis - Las Veg says:

      To figure this MESS out

      ALL that is necessary to look at is the

      Executive Pay Limit Proposal,

      Which side wants to LIMIT it?

      Which side is AGAINST LIMITING IT?

      USA has a Min wage

      why not a Max wage?

      LVKen7 at gmail dot com

    2. Brutus Centinel - Al says:

      Without a doubt this is an atrocious piece of legislation which is unwarranted and directly harmful to taxpayers. It is a move toward socialism. which we cannot afford.

      I hope it is appropriate to mention that I have argued the case at http://rightopposition.com/blog/2008/09/19/us-to-… .

    3. Michael J O'Bri says:

      The government under Mr. Paulson, President Bush and a democratic led congress continues to chip away at our world prestigious Capital Market system. The U.S government is the biggest insurer in the world with its 80% stake in AIG, owns more mortgages than any bank or mortgage company in the world, and is the world leader in negating the impact of the moral hazard principle that has guided our capital market system for centuries.

      The Federal Reserve announced this weekend that Morgan Stanley and Goldman Sachs will cease to function as Investment Banks and will now function and be regulated as commercial banks subject to the Federal Reserve ratio and tier 1 and tier II capital requirements. This changes forever the nature of bringing capital to the market and is another knee jerk reaction by this administration.

      Government by these actions continue to limited the free flow of capital and choice individuals and business can make, and will ultimately drive capital markets off shore. Additionally consider the following:

      The U.S. government's massive intervention in the financial industry may also bring new limits on executive pay.

      As the U.S. Treasury asks Congress for about $700 billion to bail out troubled financial firms, key Democratic lawmakers including House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd say they want the bill to include curbs on what executives can earn.

      Source Fox News.

      Let’s be clear of who and what this agenda is about…a socialist view of the world and the redistribution of wealth and limits on individual freedoms. Mr. Greenspan writes so eloquently in his memiors that the West was not prepared for the econimic distruction left by the socialists and communists. I have seen first hand on my many visits to Romania the toll that limits on freedom have; hopelessness dispair, and abject poverty.

      Mr. Greenspan provided great liquidity to the market when it was required after 9/11 while keeping inflation in check. It was individuals and mortgage originators that leveraged this liquidity into bad lending practices and transferred the risks to quasi government agencies Freddie and Fannie under the auspices of providing mortgage loans to individuals that have poor credit histories. The reason these folks have poor credit histories is that they hisorically do not pay back monies borrowed. Congressman Frank and Senator Dodd have been big proponents of Freddie and Fannie, and will continue to propose Federal interventions until all wealth is owned equally in this country.

      Our model of free markets have made the world safer, richer and have improved the living standards of the almost every country in the world. It goes against all economic logic to murder the system that has made America the safest and richest country on the planet. The markets will eventually right themselves, it is foolish and dangerous to limit the flow of capital, either in the form of compensation or any other economic choice.

      Finally, consider in 2007 Mr. Mack of Morgan Stanley rejected his bonus and Mr.Willumstad of AIG refused his severance from AIG. Most Wall Street bonuses are paid approximately 80% stock, 20 cash, hence there is certainly enough pain to go around. Indeed these are diffucult times, but it was the government creation of GSEs that inspired the transfer of risk to taxpayers. And, are we paying for it now!.

      Finally, the Obama campaign has hinted that if elected the next administration may ask Mr. Paulson to stay on the job. Speaks volumes.

    4. ramon espinosa says:

      GREAT EYE OPENER/ KEEP IT UP AND WHITE WASH THE OFFERDERS.

      TAKE CARE,

      RAMON

    5. mark , Houston says:

      In regards to Mr. Jarvis's comment about a "maximum wage" . Our economy is baised on a concept of rewarding personel success. Remember , there is no law stating how much money you can make if you are willing to take the risk. the wealthy in this country are not the enemy , they do crazy things like sign paychecks and benifits packages to employees . how many times have you recieved a paycheck from a poor man ?the problem is a group of "wealthy" individuals that have no morals , that is the key . exteme wealth without a sense of morality is a recipe for disaster .

    6. Ken Slusher, Forest, says:

      I agree that we should NOT be bailing out totally failing institutions. I also do NOT think there should be any ammendments or riders or any other type of items attached to this legislation. Simply the fix and nothing else.

    7. Danny Grimes says:

      Dear Morning Bell: Exactly who is to be thanked that we are sinking lower, and lower as the rest of the World- especially those who have not the roots we come from/ or have paid in blood as we have, for our freedom- watch us as- if we owe them our demise, on the World scene. Bad decisions are just that, and we deserve better than to sit by, and do nothing.Those who are sworn to serve, must do exactly that ,and if anyone would not protect, this nation they should be held for treason.

    8. Jim McLane Sr. Keypo says:

      I don't understand why the taxpayers has nothing to say about this. Why do we have to pay for all those mistakes. All the people involved should be made to pay for what they did with money or jail or both.

    9. Dave, laguna niguel, says:

      WE have a news media which completely hides the root causes of this mess we are in today. The root causes being DEMOCRATS like Carter, Clinton, Janet Reno, Jamie Gorlick, Chris Dodd, Barney Frank, And lets not leave out a major ROBBER OF TAXPAYER COFFERS, OBAMA homself!! This is shades of the USSR when everything you read was a lie or a spin, never the truth and now we have the same socialist/communist attitude controlling the press and Hollywood! We have had a socialist government for YEARS and we are now reaping its REWARDS(?!). AND STILL NO POLICY TO INCREASE OIL or ENERGY in the form of natural gas, coal, or nuclear. All we have are more demands for the government to take over even more in our lives, while the social security and medicare debacle teaches no one anything!!! We deserve what we get! All the real Americans must be dead and gone! NO REAL AMERICAN WOULD VOTE FOR A SOCIALIST LIKE OBAMA.

    10. earl gorel, houston says:

      Enough is enough, let them suffer just are we are suffering for their mistakes. I personally think they should all go to jail for their misconduct. Much of what the financials have done is more than greed & criminal in my mind and I would like to see them suffer for it, instead of receiving rediculous bonuses for their crimes……….

    11. Pingback: Dodgeblogium » Chancellor Darling

    12. Victoria, Florida says:

      Nations rise and Nations fall when the imoral business practice is held by the Wall Street casino and have their support from the Congress and Senate, who for decades allowed the loop holes to occure and with no ehtic principles to regulate this practice. Same on our selected officials who now say that they saw this coming for years and now want "we the people" take the full brunt of thier greed. No Thank You!!!!!! You will not put this burden on our shoulders or our childrens and grandchildrens lives. It is my hope and prayer, that the citizen of this great Nation, who trusted their leaders in Congress and the Senate to call them and protest against them for allowing to give the criminals in both houses the right to bail any one out when they are the onse who allowed the lack of leadership to occure. Wall Street better be prepared to see their CEO's and other institutions go down the drain as many Americans are already living in depression. NO BAIL OUT TO ANY ONE!!!!!,and certainly not at the expence of 95% of the tax payers in American for the next generation to come.

    13. Victoria, Florida says:

      My command is directed to both houses. Tell them to stop complimenting one another for jobs well done when they have caused the death of our nation by their greed and lack of oversight.

    14. JESSE THOMPSON, GEOR says:

      THIS IS MOST URGENT. It will save the taxpayer from footing the bill for the current economic crisis.

      I call it the LIFEBOAT ECONOMIC RECOVERY ACT

      This action is designed to rescue the victims (aka taxpayers) of the current real-estate fiasco similar to a lifeboat rescuing shipwrecked victims.

      There are TWO parts of this action plan.

      PART ONE:

      Stop all Foreclosures and pending foreclosures.

      Reallocate all delinquent payments to the end of the loans.

      Force financial institutions refinance all current ARM’s to 6% fixed rate at current remaining balance of Principle on loans. Those financial institutions that refuse to do so will then fall under PART TWO.

      Prohibit further refinancing on these loans for 5 years.

      Prohibit any further use of ARM’s for residential loans.

      For homes already foreclosed but still vacant with no contracts, offer them to the previous owners under these terms.

      Apply this to ONLY individual primary residence mortgages and the individual owned farms mortgages.

      You will have effectively eliminated the mortgage market as an active contributor to the economic morass at this point, without costing a single dime in taxpayer money.

      PART TWO:

      Immediately freeze all assets of all corporations involved except as above.

      Immediately freeze all assets of all individuals in same corporations from the CEO/President/Chairman of the Board down to the lowest level subordinate accounts manager. This includes the immediate family members as it is presumed that all gains would have come from the entire process.

      Perform full audit of all accounts using disinterested auditors/Federal government auditors.

      Prosecute to the fullest extent of the law all persons found to have committed illegal actions, theft, fraud, and embezzlement.

      Let all remaining corporations suffer the consequences of their own mismanagement and misdeeds, to include total collapse if it comes to that.

      Once an individual is cleared by the audit of any illegal actions release their individual assets.

      All assets of all persons involved become subject to civil litigation and the consequences thereof.

      This action will fully solve the entire fiscal morass created by well intentioned but misdirected individuals and will stabilize the US economy overnight.

      The only area of the economy that will remain in serious trouble will be the Energy market. Those can be handled by the previous actions I sent to you.

    15. JESSE THOMPSON, GEOR says:

      NO MORE GAS SHAMS – THIS PLAN COULD BE STARTED TODAY, SOME OF IT SIMULTANEOUSLY.

      BOTH THE PELOSI PLAN AND THE SENATE "NEW ERA" PLAN call for several NEW TAXES, none of which will do a single thing to help the people get through the gas and economic situations. Neither plan puts a single gallon of gas on the market; neither plan helps the economy.

      The Republicans quit listening to the people in the first place and that is why we are in this mess and distrustful of the current crop of elected officials. ANY NEW TAXES will cement our distrust in elected officials and it will wind up causing a voter revolt like you never imagined!

      The FIRST STEP IS TO MAINTAIN NO NEW TAXES! Eliminating corporate taxes would go a long way in addition to no new taxes. Corporations simply pass on the taxes to the buyer’s aka taxpayers. ALL taxes on corporations are actually on the taxpayer themselves.

      The SECOND STEP is to do the following in the order shown, ALL THE WHILE UNDERSTANDING THAT EVERYTHING THAT FAILS TO HELP PEOPLE GET THROUGH THE GAS AND ECONOMIC CRISIS IS NO GOOD. MORE TAXES ON PEOPLE WHO ARE ALREADY HURTING IS JUST PLAIN STUPID!!

      1. Expand oil and fuel storage facilities. WE have full storage tanks now and cannot pump or store any more crude oil OR FINISHED FUELS. USE US CITIZEN LABOR AND US COMPANIES ONLY. My cousin just came back from the Dakotas; they have lots of oil to pump up and already pumped up but NO WHERE TO STORE IT. During this phase also begin construction of new refineries FAR AWAY FROM THE US COASTLINES to minimize the adverse impact of seasonal storms and disasters. Use former military installations and bases closed under BRAC as the actual locations AND INCREASE PRDUCTION IN THE PRESENT REFINERIES!

      2. Connect all oil wells, oil fields, storage facilities, refineries and finished fuel storage facilities via pipeline using USE US CITIZEN LABOR AND US COMPANIES ONLY. Use trucks to get the fuel to the gas stations.

      3. DRILL HERE, DRILL NOW, DONT WAIT ANY LONGER. This requires eliminating the prohibition on drilling from the Federal Operating Budget. That is where the Democrats have buried it so that anytime a federal operating budget is passed, so is the ban on drilling. THIS IS NOT NEGOTIABLE.

      4. The next quickest thing to do is to convert all FEDERAL, STATE AND LOCAL government vehicles to LPG/LNG. Provide people with the ability to fill their cars from their homes natural gas service. To encourage the citizen to also do the same, permit them to deduct the expense of conversion of their vehicles from their taxes. Use US Citizen businesses and labor to do it. Permit the fuel retail vendors the same kind of tax breaks for installing the natural gas equipment. PRICE ALL RETAIL STATION NATURAL GAS IN GALLONS, NOT POUNDS OR CUBIC FEET.

      5. The next thing to do is to permit the leaning out of the engine fuel systems of all vehicles on the road in the US. Currently ALL injector systems and carburetion systems are designed to run VERY RICH, over twice as much fuel is used than with LEAN BURN settings and equipments. If necessary change the EPA rules to permit leaner burning engines.

      6. Start contracting via the Department of Energy to install wind generators in the US primary wind corridors. Put the manufacturing, supply and storage facilities near the cities that have had the highest job losses in the past few years. USE US CITIZEN LABOR AND US COMPANIES ONLY.

      7. Start construction of proven nuclear power generating stations. Use the closed military bases and installations as the locations for them. USE US CITIZEN LABOR AND US COMPANIES ONLY. This program can be started today, will yield results within one year and results will magnify exponentially as more steps are taken and completed.

      Doing the plan the way shown will also cut the unemployment rate by creating new jobs paid for by the public sector, not government taxes.

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