Rep. Thaddeus McCotter (R-MI) speaks about the pending $700 "bailout,". . . and says more in three minutes than anyone else has said in three days.
"Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost."
The news media carried the story today that the bailout bill has been defeated in the House of Representatives, 228-205.
News media such as the AP reported that the "stock market plunged." Plunged? How far is that? From their own report:
"The Dow fell 777.68 points, just shy of 7 percent, to 10,365.45, its lowest close in nearly three years. The decline also surpasses the record for the biggest decline during a trading day — 721.56 at one point on Sept. 17, 2001, when the market reopened after 9/11."
Although the Dow today fell by more points than it did in 2001, it fell less in percentage points: The Dow fell 7.1% in 2001. Did the world come to an end then? No, and it won't now.
I for one won't sell out my constitutionally protected freedoms for some financial "emergency." We will always have emergencies. We must hold fast to the one document which provides a sure foundation in a shaky political and economic world--the Constitution.
Following are oaths of office for the President and Congressmen. Note that the specific duty these public servants have is to "support, preserve, protect, and defend" the Constitution.
Presidential Oath of Office:
"I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."
Congressional Oath (recited every two years at the opening of a new Congress:
"I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God."
On July 2, 2008, Counterpunch.org published the following Ralph Nader article, in which he predicted catastrophe for Wall Street and the American public, absent urgent changes by Congress:
Greed Without Accountability - Economic Domino Theory
By RALPH NADER
The worst top management of giant corporations in American history is also by far the most hugely paid. That contradiction applies as well to the Boards of Directors of these global companies.
Consider these illustrations:
The bosses of General Motors (GM) have presided over the worst decline of GM shares in the last fifty years, the lowering of GM bonds to junk status, the largest money losses and layoffs of tens of thousands of workers. Yet these top executives are still in place and still receiving much more pay than their successful counterparts at Toyota.
GM’s stock valuation is under $7 billion dollars, while Toyota is valued at over $160 billion. Toyota, having passed GM in worldwide sales, is about to catch up with and pass GM in sales inside the United States itself!
GM’s executives stayed with their gas guzzling SUVs way beyond the warning signs. Their vehicles were uninspiring and technologically stagnant in various ways. They were completely unprepared for Toyota’s hybrid cars and for the upward spiral in gasoline prices. They’re cashing their lucrative monthly checks with the regular votes of confidence by their hand-picked Board of Directors.
About the same appraisal can be made of Ford Motor Co., which at least brought in new management to try to do something about that once famous company’s sinking status.
Then there are the financial companies. Top management on Wall Street has been beyond incompetent. Wild risk taking camouflaged for years by multi-tiered, complex, abstract financial instruments (generally called collateralized debt obligations) kept the joy ride going and going until the massive financial hot air balloon started plummeting. Finally told to leave their high posts, the CEOs of Merrill-Lynch and Citigroup took away tens of millions of severance pay while Wall Street turned into Layoff Street.
The banks, investment banks and brokerage firms have tanked to levels not seen since the 1929-30 collapse of the stock market. Citigroup, once valued at over $50 per share is now under $17 a share.
Washington Mutual – the nation’s largest savings bank chain was over $40 a share in 2007. Its reckless speculative binge has driven it down under $5 a share. Yet its CEO Kerry Killinger remains in charge, with the continuing support of his rubberstamp Board of Directors. A recent $8 billion infusion of private capital gave a sweetheart deal to these new investors at the excessive expense of the shareholders.
Countrywide, the infamous giant mortgage lender (subprime mortgages) is about to be taken over by Bank of America. Its CEO is taking away a reduced but still very generous compensation deal.
Meanwhile, all these banks and brokerage houses’ investment analysts are busy downgrading each others’ stock prospects.
Over at the multi-trillion dollar companies Fannie Mae and Freddie Mac, the shareholders have lost about 75 percent of their stock value in one year. Farcically regulated by the Department of Housing and Urban Affairs, Fannie and Freddie were run into the ground by taking on very shaky mortgages under the command of CEOs and their top executives who paid themselves enormous sums.
These two institutions were set up many years ago to provide liquidity in the housing and loan markets and thereby expand home ownership especially among lower income families. Instead, they turned themselves into casinos, taking advantage of an implied U.S. government guarantee.
The Fannie and Freddie bosses created another guarantee. They hired top appointees from both Republican and Democratic Administrations (such as Deputy Attorney General Jamie Gorelick) and lathered them with tens of millions of dollars in executive compensation. In this way, they kept federal supervision at a minimum and held off efforts in Congress to toughen regulation. These executives are all gone now, enjoying their maharajan riches with impunity while pensions and mutual funds lose and lose and lose with no end in sight, short of a government-taxpayer bailout.
Over a year ago, leading financial analyst Henry Kaufman and very few others warned about “undisciplined” (read unregulated) and “mis-pricing” of lower quality assets. Mr. Kaufman wrote in the Wall Street Journal of August 15, 2007 that “If some institutions are really ‘too big to fail,’ then other means of discipline will have to be found.”
There are ways to prevent such crashes. In the nineteen thirties, President Franklin Delano Roosevelt chose stronger regulation, creating the Securities and Exchange Commission (SEC) and several bank regulatory agencies. He saved the badly listing capitalist ship.
Today, there is no real momentum in a frozen Washington, D.C. to bring regulation up to date. To the contrary, in 1999, Congress led by Senator McCain’s Advisor, former Senator Phil Gramm and the Clinton Administration led by Robert Rubin, Secretary of the Treasury, and soon to join Citibank, de-regulated and ended the wall between investment banks and commercial banking known as the Glass-Steagall Act.
Clinton and Congress opened the floodgates to rampant speculation without even requiring necessary and timely disclosures for the benefit of institutional and individual investors.
Now the entire U.S. economy is at risk. The domino theory is getting less theoretical daily. Without investors obtaining more legal authority as owners over their out of control company officers and Boards of Directors, and without strong regulation, corporate capitalism cannot be saved from its toxic combination of endless greed and maximum power—without responsibility.
Uncle Sam, the deeply deficit ridden bailout man, may have another taxpayers-to-the-rescue operation for Wall Street. But don’t count on stretching the American dollar much more without devastating consequences to and from global financial markets in full panic.
Consider the U.S. dollar like an elastic band. You can keep stretching this rubber band but suddenly it BREAKS. Our country needs action NOW from Washington, D.C.
Ralph Nader is running for president as an independent.
The following is a letter to the editor of the Ogden Standard Examiner (Ogden, Utah) which was published September 28, 2008:
Dear Editor,
All Americans should be outraged that the government proposes using taxpayers’ money to pay off the bad debts of foreign banks. U.S. Treasury Secretary Henry Paulson said on ABC television that "foreign banks will be able to unload bad financial assets under a $700 billion U.S. proposal . . ." .
Since the U.S. government is already in debt, every American taxpayer—and future generations of taxpayers—are being placed even deeper into debt. Why? To bail out foreign bankers. Why must U.S. taxpayers now pay for the poor business decisions of bankers in foreign countries?
We should be only slightly less outraged that the government is taking taxpayer money to give to failing U.S. businesses—businesses run by "expert" corporate officers earning millions of dollars in salaries and bonuses each year.
The bailout money will come from taxpayers. Paying taxes is mandatory—if we don’t pay our taxes we are fined or imprisoned. Thus, we are being forced under threat of fines or imprisonment to give our money away to foreign bankers and U.S. financial institutions. This is a serious misuse of the government’s taxing authority which must not be allowed to happen.
All Americans should write or email their congressman, senators, the President, and the candidates running for office—immediately—to let them know that we oppose this misuse of taxpayers’ money.
Marty W. Jensen
South Ogden Utah
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The purpose of this blog is be a voice in support of and in defense of the Constitution of the United States of America. In the spirit of the Founding Fathers
- We seek to understand the principles of constitutional government as originally intended.
- We evaluate the current practice of government in light of the Founders' original intent.
- We encourage good men and women everywhere to rise up in support and defense of the Constitution.
