Many of the headlines over the past week read “Confirm Geithner or Else!” As corruption in Washington continues to run amuck, “too big to fail” seems to be the excuse to overlook past and current wrongdoings.
Tim Geithner is now too big to fail. The economic crisis is too dangerous to let a man who is too big to fail sit on the sideline. Geithner must be “Superman.” He must have powers that are extraterrestrial, as there is no one else in the financial sector that has the ability to put the economy back on track again according to President Obama and members in the Senate who approved of his nomination.
Well folks, all I can say is if you liked the way the economic crisis has been handled under the Bush Administration, you will no doubt be thrilled with what’s to come. For those who expected change, brace yourselves for a difficult dose of reality. Real change would have been a free-market solution. Instead, Geithner will continue policy that will further erode the free market and expand the power of the government.
Tim Geithner has not sat idly on the sidelines for the past year. He has already had extensive involvement in the government’s response to the financial mayhem. Based on Geithner’s record, he seems to think that bailouts are the solution. He advocated the rescue of Bear Stearns and played a key role in the rescues of American International Group (AIG), Bank of America and Citigroup. It’s a good thing that top executives in these companies put the funds to good use. AIG felt lavish executive retreats were necessary. Bank of America paid huge bonuses to Merrill Lynch executives. Citigroup partnered with the New York Mets baseball team by paying a $400 million naming-right expenditure to call the stadium where the Mets play “Citi Field.” Some may rightfully argue the cost/benefit of such a decision, and it would be a legit argument if the company did not receive federal money. Besides, I thought the credit markets were frozen!
Based on the testimony Geithner gave at his confirmation hearing, I am left wondering what exactly those “superpowers” are.
Geithner said, “Senators, the ultimate costs of this crisis will be greater, if we do not act with sufficient strength now. In a crisis of this magnitude, the most prudent course is the most forceful course.” He says Obama’s stimulus plan “will meet that test.” (1)
It is interesting that the scare tactics continue in an effort to give the government an excuse to spend trillions of dollars and hold stakes in our largest banks; when in reality, this “crisis” isn’t even close to what was experienced in the 1970’s. Has Geithner seen Obama’s stimulus plan? Perhaps he could explain how the same tax incentives that were part of Bush’s plan last year and the massive government spending that includes handouts to states to fund safety-net programs as well as free contraceptives would stimulate the economy. The aim is to stimulate the economy isn’t it? It’s possible that Speaker Pelosi was thinking about a different kind of stimulation…
Geithner mentions the Senate’s passage of the second Troubled Asset Relief Program (TARP) tranche, but says “we have to fundamentally reform this program” to ensure there’s enough credit to support the recovery. He also says the nation needs “investments” in infrastructure, a strategy “to get us back as quickly as possible to a sustainable fiscal position” and then “comprehensive financial reform” so the world will “never again face a crisis of this severity.” (1)
It seems that Citigroup didn’t have a problem getting credit. Nowhere in his testimony does Geithner mention repeal of the Community Reinvestment Act – the act which played a key role in the housing debacle. This act forced banks through government mandates to loan money to people who could not afford to repay which led to the birth of the subprime mortgage market. Instead of overusing the word “crisis,” his plan should focus on transparency and prudent lending standards.
Geithner may not wish to tip his hand at the moment, but I would expect to see proposed changes to the Financial Accounting Standards Board Statement Number 157 which has failed in the attempt to value illiquid assets and has earned the phrase “mark-to-make-believe accounting.”
As for infrastructure spending…there is an idea that’s never been tried before. His expertise in economics should reveal to him that most of the benefits of infrastructure spending are delayed and could take effect during an inflationary period. In addition, the money is rarely used for what it was intended, and we don’t see real economic growth when the government spends money. History has proven that the government cannot spend the country out of recession. This kind of spending can make our dollar worthless, however!
Geithner’s responsibilities also include oversight of the Internal Revenue Service (IRS). It is comical that we entrust a person who has evaded taxes to be in charge of the IRS. Geithner claims his mistakes were innocent. However, if they were innocent, should America have confidence in a man who has difficulty using Turbo Tax (a software that people with no accounting/financial background can easily use), has difficulty understanding IRS Publication 503, and doesn’t realize he has to pay Social Security tax, Medicare tax and employed an immigrant housekeeper who lacked proper work papers?
In summary, Geithner’s appointment further illustrates that there is no real change in Washington. In addition to Geithner’s tax problems, there is a very questionable record of “expertise.” He’s played a pivotal role in managing TARP funds. It’s quite clear that the first half of TARP funds were misspent. As President of the New York Federal Reserve Bank, his supervision of corporate giants like Citigroup was questionable. Although Geithner talked about holding such institutions to the highest regulatory standards, the record shows that New York Fed relaxed the standards as the company bet big on subprime mortgages and had massive risk exposure to other perilous investments.
So why is it that we have so much confidence in people such as Geithner to fix a problem when they have shown poor judgment and played a role in causing the problem? Answer: the elite financial club has its benefits.
(1) http://blogs.wsj.com/economics/2009/01/21/live-blogging-tim-geithners-confirmation-hearing/
This column is also cross posted at our new website: http://www.conservativetoday.org/
Showing posts with label Democrats. Show all posts
Showing posts with label Democrats. Show all posts
Tuesday, January 27, 2009
Tuesday, December 9, 2008
Rod Blagojevich: Windy City Politics at its Best
December 9, 2008 marks the day the world gets an inside look into Chicago politics. This is not to say that people are unaware of Chicago’s tainted political image, as history has painted that picture very well. However, in lieu of the fact that one of Chicago’s own has just been elected President, people’s memories will be refreshed. Illinois Governor Rod Blagojevich was taken into federal custody this morning apparently before he could go for his morning workout.
“Blago,” as he’s often referred to in Illinois, has left his state in sheer disgrace. For those who haven’t paid attention, below is a summary of the Governor’s corrupt and idiotic policies:
Economic Policy
Far left lunacy is actually a kind description. Perhaps the most famous was his idea of a “gross receipts tax.” For those who have studied basic accounting, yes, you read that correctly. To clarify for those who haven’t, our governor thought it would be a brilliant idea to tax Illinois businesses on revenue BEFORE expenses are deducted. If Blago had a modicum of economic knowledge, he would realize that this type of taxation would not only stifle economic growth, but also increase the price of products and slow job creation. How so? Taxes are a cost to business, which is ultimately passed onto the consumer. Just as materials and labor are factored into the cost of a product, so is a company’s tax burden. When costs increase, business is forced to do more with less, which eventually leads to layoffs, and takes away the ability to use capital to pursue opportunities that lead to growth. A tax of this nature would simply drive business out of the state of Illinois. Why not relocate to neighboring Indiana? In summary, the outcome of a gross receipts tax would mean higher prices for consumers, less jobs and would ultimately LOWER tax revenue for the government. After all, if business leaves, there will be no tax to levy. Perhaps politicians at the federal level will take note of this and rethink our federal corporate income tax rate.
More recently, Blago threatened Bank of America by saying that the state would halt its dealings with the bank because it recently canceled a credit line to Republic Windows & Doors, a local factory on the verge of bankruptcy. Seeing that the current credit crisis stemmed from banks being required to comply with federal mandates that forced them to loan money to people who could not afford to repay, it’s not exactly a stellar idea that politicians use this kind of leverage to force lending institutions into making unwise decisions. Some politicians never learn, do they? Does this sound like extortion?
Corruption
Speaking of extortion, let’s move on to what has brought about the federal charges Blago is currently facing.
Instead of working on a plan to replace President-elect Obama’s vacant Senate seat with someone who is qualified, he thought it would be better to auction it off to the highest bidder. Why not enlist it on EBay?!
Blago also threatened to illegally withhold state aid to the currently ailing Chicago Tribune on the sole basis that the newspaper’s editorial writers weren’t saying very nice things about him. He demanded that these writers be fired in order to receive aid. Since I do not receive state aid, I’ll continue on…..
One of the most famous plays in Chicago’s corrupt political playbook is the famous “pay-to-play” politics. If you are a contractor looking to do business with the state government, Blago will throw work your way in exchange for a campaign donation. The deeper your pockets, the more business you receive.
One can only wonder what more will be uncovered as the Feds begin to build their case. Plenty has already been caught on tape.
Illinois residents are left to wonder if the corruption will ever end. As comical as is sounds, Blago was brought in with the intent to end corruption. He replaced former Governor George Ryan who is currently serving a six-year prison sentence (currently seeking a pardon) on charges of racketeering and fraud. Instead, the corruption continues, and Blago enjoys the lowest governor approval rating in over three decades according to Chicago Tribune polls.
Blago joins a long list of Illinois politicians who have been tied to scandals. While President-elect Obama has not been charged with any wrongdoing in the midst of this controversy, he is cut from the same cloth of the corrupt Chicago political machine and shares many of the same political connections (Rahm Emanuel and Tony Rezko, for example). It would be unfair to accuse one political party of corruption, as both Democrats and Republicans have been convicted of crimes; however, the media has done a very good job downplaying the depth of corruption that plagues Chicago politicians. Obama faces an uphill battle in the eyes of those all too familiar with “Windy City” politics.
“Blago,” as he’s often referred to in Illinois, has left his state in sheer disgrace. For those who haven’t paid attention, below is a summary of the Governor’s corrupt and idiotic policies:
Economic Policy
Far left lunacy is actually a kind description. Perhaps the most famous was his idea of a “gross receipts tax.” For those who have studied basic accounting, yes, you read that correctly. To clarify for those who haven’t, our governor thought it would be a brilliant idea to tax Illinois businesses on revenue BEFORE expenses are deducted. If Blago had a modicum of economic knowledge, he would realize that this type of taxation would not only stifle economic growth, but also increase the price of products and slow job creation. How so? Taxes are a cost to business, which is ultimately passed onto the consumer. Just as materials and labor are factored into the cost of a product, so is a company’s tax burden. When costs increase, business is forced to do more with less, which eventually leads to layoffs, and takes away the ability to use capital to pursue opportunities that lead to growth. A tax of this nature would simply drive business out of the state of Illinois. Why not relocate to neighboring Indiana? In summary, the outcome of a gross receipts tax would mean higher prices for consumers, less jobs and would ultimately LOWER tax revenue for the government. After all, if business leaves, there will be no tax to levy. Perhaps politicians at the federal level will take note of this and rethink our federal corporate income tax rate.
More recently, Blago threatened Bank of America by saying that the state would halt its dealings with the bank because it recently canceled a credit line to Republic Windows & Doors, a local factory on the verge of bankruptcy. Seeing that the current credit crisis stemmed from banks being required to comply with federal mandates that forced them to loan money to people who could not afford to repay, it’s not exactly a stellar idea that politicians use this kind of leverage to force lending institutions into making unwise decisions. Some politicians never learn, do they? Does this sound like extortion?
Corruption
Speaking of extortion, let’s move on to what has brought about the federal charges Blago is currently facing.
Instead of working on a plan to replace President-elect Obama’s vacant Senate seat with someone who is qualified, he thought it would be better to auction it off to the highest bidder. Why not enlist it on EBay?!
Blago also threatened to illegally withhold state aid to the currently ailing Chicago Tribune on the sole basis that the newspaper’s editorial writers weren’t saying very nice things about him. He demanded that these writers be fired in order to receive aid. Since I do not receive state aid, I’ll continue on…..
One of the most famous plays in Chicago’s corrupt political playbook is the famous “pay-to-play” politics. If you are a contractor looking to do business with the state government, Blago will throw work your way in exchange for a campaign donation. The deeper your pockets, the more business you receive.
One can only wonder what more will be uncovered as the Feds begin to build their case. Plenty has already been caught on tape.
Illinois residents are left to wonder if the corruption will ever end. As comical as is sounds, Blago was brought in with the intent to end corruption. He replaced former Governor George Ryan who is currently serving a six-year prison sentence (currently seeking a pardon) on charges of racketeering and fraud. Instead, the corruption continues, and Blago enjoys the lowest governor approval rating in over three decades according to Chicago Tribune polls.
Blago joins a long list of Illinois politicians who have been tied to scandals. While President-elect Obama has not been charged with any wrongdoing in the midst of this controversy, he is cut from the same cloth of the corrupt Chicago political machine and shares many of the same political connections (Rahm Emanuel and Tony Rezko, for example). It would be unfair to accuse one political party of corruption, as both Democrats and Republicans have been convicted of crimes; however, the media has done a very good job downplaying the depth of corruption that plagues Chicago politicians. Obama faces an uphill battle in the eyes of those all too familiar with “Windy City” politics.
Friday, November 14, 2008
Dems and National Security: Where Change Is Actually Needed
Since President-Elect Obama's victory two very important national security issues have been brought up and commented on: the status of the prisons at Guantanamo Bay and the Missile Defense System. Both answers have been discouraging.
Mr. Obama gave no guarantees that the MDS program in Eastern Europe would continue. This answer comes only a few days after Russia brazenly moved missiles in the direction of Poland and a few months after Russia invaded Georgia. Earlier this year threatened the Ukraine with nuclear destruction if it joined NATO. This answer comes during a time with an uncooperative Iran testing long-range, nuke-able missiles with increasing frequency. This answer comes when North Korea is on the verge of a new era of leadership or a new world of chaos as the Stalinist state deals with competing strongmen.
Apparently, our new president has not learned anything from the Cold War. The benefits of the containment strategy are up for debate, but the deterrence strategy was undeniably one of the major reasons the Cold War never went hot between the United States and the Soviet Union. Our ability to retaliate in such force as to completely annihilate the Soviet Union kept the Communists from attempting such an insane idea. Our conventional force acts a deterrent as well. North Korea could easily overpower the forces we have just outside, except that tens of thousands of dead American soldiers would not bode well for the power hungry dynasty. There's a reason our only major enemy during the two decades since the fall of the Iron Curtain has been fanatical terrorists bent on our complete annihilation and its not our lack of things that go boom.
Concerning Gitmo, President Bush has had quite the time trying to explain to the public and to the Democratic left the complexity of the operation and the reality of their detainment. Many of the terrorists and terrorist suspects at Gitmo were picked up on the battlefield. Out of the original 600 prisoners, now there are only 250. Some of those released ended up back in prison, picked up while aiming their rifles at American soldiers. Some have even been been culprits of suicide bombings and other terrorist attacks. Many of those still in prison have nowhere to be sent as many nations think having terrorists and terror suspects in their borders an abhorrent idea. These terrorists are not normal soldiers, but they are also not the straight up criminals you find daily in American courtrooms. This is a new war in which both national security and criminal justice must be sated. This is not an easy task, and as White House Spokesman Dana Perino has pointed out the Democrats are about to discover this jarring fact.
There are two major questions we must ask the President-Elect if he plans on shutting Gitmo down. Firstly, will the terrorists and terror suspects have access to American civilian courts? Secondly, where are these terrorists and terror suspects to go if no nation takes them?
The first answer can be found in the Supreme Court's ruling Boumediene v. Bush. This is a ruling in which a terrorist was given access to American civilian courts so he may challenge his detention. The 5-4 decision was along ideological lines and outraged the White House as well as national security experts. The ability of terror suspects to challenge their detention through civilian means, and the idea that the War on Terror is only a law enforcement or a military matter, will subvert our defenses against an enemy that has created a version of asymmetrical warfare that requires both law enforcement and military methods to defeat it.
The second answer can be found in another ruling in which 17 Uighur terror suspects found in Afghanistan were allowed entry in to the United States since no other nation would take them. These suspects were not found to have committed crimes against the United States, but there is a significant Islamist insurgency by Uighurs in China. The biggest threats against the 2008 Olympics in Bejing were from these Islamists. Although not our enemies by action, these men are of the same mind and ideology as the bombers in Iraq, the murderers in Spain and Britain and the suicide pilots on 9/11. It is one thing to let these men go because they are not a direct threat to us; it is another thing to send them into a completely alien culture they may find detestable at minimum, an abomination at most. We have millions of non-citizens crossing our borders illegally to find better jobs and lives and there are millions more are trying to get into the United States through legal means. Why would should we allow 18 non-citizens that may have ideological and cultural animosity towards us? One is not an American purely by the fact one resides in America.
President-Elect Obama needs to set his mind straight on these issues. Both involves the lives of Americans and both involve the security of many nations, not just ours. We cannot allow aggressive, imperialistic nations to intimate us and our free allies nor can we just throw back to old, static strategies when it comes to a new breed of military enemy in a new, complex world. Mr. Obama needs to adhere to his talk of change because if he sticks to the rhetoric of the old Democratic Party and of the left wing nothing good will come of it.
Cross-posted at Generation Patriot
Mr. Obama gave no guarantees that the MDS program in Eastern Europe would continue. This answer comes only a few days after Russia brazenly moved missiles in the direction of Poland and a few months after Russia invaded Georgia. Earlier this year threatened the Ukraine with nuclear destruction if it joined NATO. This answer comes during a time with an uncooperative Iran testing long-range, nuke-able missiles with increasing frequency. This answer comes when North Korea is on the verge of a new era of leadership or a new world of chaos as the Stalinist state deals with competing strongmen.
Apparently, our new president has not learned anything from the Cold War. The benefits of the containment strategy are up for debate, but the deterrence strategy was undeniably one of the major reasons the Cold War never went hot between the United States and the Soviet Union. Our ability to retaliate in such force as to completely annihilate the Soviet Union kept the Communists from attempting such an insane idea. Our conventional force acts a deterrent as well. North Korea could easily overpower the forces we have just outside, except that tens of thousands of dead American soldiers would not bode well for the power hungry dynasty. There's a reason our only major enemy during the two decades since the fall of the Iron Curtain has been fanatical terrorists bent on our complete annihilation and its not our lack of things that go boom.
Concerning Gitmo, President Bush has had quite the time trying to explain to the public and to the Democratic left the complexity of the operation and the reality of their detainment. Many of the terrorists and terrorist suspects at Gitmo were picked up on the battlefield. Out of the original 600 prisoners, now there are only 250. Some of those released ended up back in prison, picked up while aiming their rifles at American soldiers. Some have even been been culprits of suicide bombings and other terrorist attacks. Many of those still in prison have nowhere to be sent as many nations think having terrorists and terror suspects in their borders an abhorrent idea. These terrorists are not normal soldiers, but they are also not the straight up criminals you find daily in American courtrooms. This is a new war in which both national security and criminal justice must be sated. This is not an easy task, and as White House Spokesman Dana Perino has pointed out the Democrats are about to discover this jarring fact.
"We've tried very hard to explain to people how complicated it is. When you pick up people off the battlefield that have a terrorist background, it's not just so easy to let them go," Perino said. "These issues are complicated, and we have put forward a process that we think would work in order to put them on trial through military tribunals."
The first answer can be found in the Supreme Court's ruling Boumediene v. Bush. This is a ruling in which a terrorist was given access to American civilian courts so he may challenge his detention. The 5-4 decision was along ideological lines and outraged the White House as well as national security experts. The ability of terror suspects to challenge their detention through civilian means, and the idea that the War on Terror is only a law enforcement or a military matter, will subvert our defenses against an enemy that has created a version of asymmetrical warfare that requires both law enforcement and military methods to defeat it.
The second answer can be found in another ruling in which 17 Uighur terror suspects found in Afghanistan were allowed entry in to the United States since no other nation would take them. These suspects were not found to have committed crimes against the United States, but there is a significant Islamist insurgency by Uighurs in China. The biggest threats against the 2008 Olympics in Bejing were from these Islamists. Although not our enemies by action, these men are of the same mind and ideology as the bombers in Iraq, the murderers in Spain and Britain and the suicide pilots on 9/11. It is one thing to let these men go because they are not a direct threat to us; it is another thing to send them into a completely alien culture they may find detestable at minimum, an abomination at most. We have millions of non-citizens crossing our borders illegally to find better jobs and lives and there are millions more are trying to get into the United States through legal means. Why would should we allow 18 non-citizens that may have ideological and cultural animosity towards us? One is not an American purely by the fact one resides in America.
President-Elect Obama needs to set his mind straight on these issues. Both involves the lives of Americans and both involve the security of many nations, not just ours. We cannot allow aggressive, imperialistic nations to intimate us and our free allies nor can we just throw back to old, static strategies when it comes to a new breed of military enemy in a new, complex world. Mr. Obama needs to adhere to his talk of change because if he sticks to the rhetoric of the old Democratic Party and of the left wing nothing good will come of it.
Cross-posted at Generation Patriot
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