We’ve been scammed: Federal Reserve secretly administered $7+ trillion bailout to benefit bankers

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Opposites in many ways, the Tea Party movement and Occupy Wall Street have this in common: Both have channeled the public’s not always well-informed anger over the behavior of banks and government during the financial crisis. As it turns out, they didn’t know the half of it, and neither did the rest of us, including Congress.

As a story in the January issue of Bloomberg Markets magazine shows, between August 2007 and April 2010, the Federal Reserve secretly administered the largest bailout in U.S. history without approval or oversight from the legislative branch. To give a sense of the scale of this effort, as of March 2009, the Fed had committed $7.77 trillion, more than half the value of everything produced in the U.S. that year, to the rescue.

Even as they were tapping the Fed for emergency loans at rates as low as 0.01 percent, the banks that were the biggest beneficiaries of the program were assuring investors that their firms were healthy. Moreover, these banks used money they had received in the bailout to lobby Congress against reforms aimed at preventing the next collapse.

By keeping the details of its activities under wraps, the Fed deprived lawmakers of the essential information they needed to draft those rules. The Dodd-Frank Wall Street Reform and Consumer Protection Act, for example, was debated and passed by Congress in 2010 without a full understanding of how deeply the banks had depended on the Fed for survival. Similarly, lawmakers approved the Treasury Department’s $700 billion Troubled Asset Relief Program to rescue the banks without knowing the details of the far larger bailout being run by the Fed.

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Read more at Bloomberg.com HERE.

Senate voting to allow military to imprison US citizens without trial

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[T]he Senate is gearing up for a vote on Monday or Tuesday that goes to the very heart of who we are as Americans. The Senate will be voting on a bill that will direct American military resources not at an enemy shooting at our military in a war zone, but at American citizens and other civilians far from any battlefield — even people in the United States itself.

Senators need to hear from you, on whether you think your front yard is part of a “battlefield” and if any president can send the military anywhere in the world to imprison civilians without charge or trial.

The Senate is going to vote on whether Congress will give this president—and every future president — the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world. Even Rep. Ron Paul (R-Texas) raised his concerns about the NDAA detention provisions during last [week’s] Republican debate. The power is so broad that even U.S. citizens could be swept up by the military and the military could be used far from any battlefield, even within the United States itself.

The worldwide indefinite detention without charge or trial provision is in S. 1867, the National Defense Authorization Act bill, which will be on the Senate floor on Monday. The bill was drafted in secret by Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.) and passed in a closed-door committee meeting, without even a single hearing.

I know it sounds incredible. New powers to use the military worldwide, even within the United States?

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Read more from Chris Anders, Washington Legislative Office, HERE.

Obama Pushing Shooters Off Public Lands

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Gun owners who have historically been able to use public lands for target practice would be barred from potentially millions of acres under new rules drafted by the Interior Department, the first major move by the Obama administration to impose limits on firearms.

Officials say the administration is concerned about the potential clash between gun owners and encroaching urban populations who like to use same land for hiking and dog walking.

“It’s not so much a safety issue. It’s a social conflict issue,” said Frank Jenks, a natural resource specialist with Interior’s Bureau of Land Management, which oversees 245 million acres. He adds that urbanites “freak out” when they hear shooting on public lands.

If the draft policy is finally approved, some public access to Bureau lands to hunters would also be limited, potentially reducing areas deer, elk, and bear hunters can use in the West.

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Read more at USNEWS.com HERE.

Too much regulation? Blame the crony capitalists

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Over at Mother Jones, Kevin Drum has a piece where he says, essentially, companies may complain about complex regulations but the truth is that they love them, because they can use complex regulations to their advantage when competing with other businesses. In fact, Drum argues, companies lobby hard to turn simple rules into complex ones:

“Businesses don’t like simple rules, because simple rules are hard to evade. So they lobby endlessly for exemptions both big and small. This is why we end up with tax subsidies for bow-and-arrow makers. It’s why we end up with environmental rules that treat a hundred different industries a hundred different ways. It’s why financial regulators don’t enact simple leverage rules or place firm asset caps on firm size. Those would be hard to get around and might genuinely eat into bank profits. Complex rules, conversely, are the meat and drink of $500-per-hour lawyers and whiz kid engineers. If the rules are complicated enough, smart lawyers can always find ways around them. And American corporations employ lots of smart lawyers.”

Keep this firmly in mind the next time you hear someone from the Chamber of Commerce complaining about how many thousands of pages of regulations they have to comply with.

Drum’s possible over-generalization is nonetheless a sad truth about the way many companies interact with regulators. Yes, companies are trying to get stuff from the government, and this ends up making regulations more complex than they would otherwise be. I would even argue that there are regulations that only exist because companies lobbied for them (the same way Warren Buffet is asking for his taxes to go up).

Obviously, this flies in the face of complaints about complexity and uncertainty brought about by the regulatory regime. But we often forget the other side of this equation. The fact that these companies manage to get what they want from regulators also flies in the face of the notion of independent regulatory agencies. It takes two to tango: Some regulators are more than happy to grant exemptions and special rules to given companies that will benefit from the resulting complexity.

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Read more at National Review Online HERE.

Climategate 2.0: New E-Mails Rock The Global Warming Debate

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A new batch of 5,000 emails among scientists central to the assertion that humans are causing a global warming crisis were anonymously released to the public yesterday, igniting a new firestorm of controversy nearly two years to the day after similar emails ignited the Climategate scandal.

Three themes are emerging from the newly released emails: (1) prominent scientists central to the global warming debate are taking measures to conceal rather than disseminate underlying data and discussions; (2) these scientists view global warming as a political “cause” rather than a balanced scientific inquiry and (3) many of these scientists frankly admit to each other that much of the science is weak and dependent on deliberate manipulation of facts and data.

Regarding scientific transparency, a defining characteristic of science is the open sharing of scientific data, theories and procedures so that independent parties, and especially skeptics of a particular theory or hypothesis, can replicate and validate asserted experiments or observations. Emails between Climategate scientists, however, show a concerted effort to hide rather than disseminate underlying evidence and procedures.

“I’ve been told that IPCC is above national FOI [Freedom of Information] Acts. One way to cover yourself and all those working in AR5 would be to delete all emails at the end of the process,”writes Phil Jones, a scientist working with the United Nations Intergovernmental Panel on Climate Change (IPCC), in a newly released email.

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Read more at Forbes.com HERE.

An English Thanksgiving, 1942

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With Americans in uniform serving all over the world today, the idea of them celebrating Thanksgiving abroad does not strike anyone as unusual. With Americans locked in a world war in 1942, it certainly was.

The hundreds of thousands of U.S. troops fighting the Axis powers in North Africa, the South Pacific and Europe celebrated the first global Thanksgiving as best they could, in the steel bulkheads of a warship’s mess or the canvas of a jungle tent. England—teeming with American soldiers and sailors and airmen, ready to defend our ally against a possible German invasion and beginning preparations for an assault on Nazi-conquered Europe—was another matter.

Greg Jenkins recollects his Thanksgiving trip with President Bush to visit the troops in Iraq.

In those dark days, Americans took special pleasure in displaying their homegrown holiday to the Mother Country. The English were dubious at first but slowly realized they were being invited to share in something very special.

Helping to win them over was an extraordinary act of generosity very much in keeping with the spirit of the holiday. Merchant ships had carried tons of frozen turkey across the submarine-infested Atlantic for the big day. Then the Yanks announced they would donate all of it to the thousands of British war wounded in hospitals. Instead they would dine on roast pork and eat plum pudding for desert, alas without the standard rum sauce. “The quartermaster failed to deliver the rum,” a newsman reported.

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Read more at WSJ HERE.

Labor Department May Sink Another $14 Million into Solyndra

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Taxpayers will likely shell out another $14.3 million in federal aid to the 1,100 people formerly employed by defunct solar company Solyndra. The Labor Department announced Monday that it had approved Trade Adjustment Assistance payments for those former employees, which may pay out about $13,000 for each.

TAA is designed to compensate American workers laid off as a direct result of foreign competition, and to train them for other occupations – though the program has shown few signs of success. The Labor Department’s move is a tacit assertion that Solyndra’s failure was due to competition from the Chinese, which has been the administration’s and congressional Democrats’ position since Solyndra declared bankruptcy in August.

But the claim hardly holds water. As Barry Cinnamon, CEO of Westinghouse Solar, pointed out shortly after Solyndra declared bankruptcy, American solar panels, on average, typically cost about 10 to 20 percent more than ones produced in China. But Solyndra’s product cost about twice what Chinese panels did.

Solyndra’s business model was sustainable as long as refined silicon, the material used by Solyndra’s competitors but left out in the company’s unique panel design, remained expensive. When its price fell, so too did the price of solar panels. But because it did not use refined silicon, Solyndra’s production costs did not decline with those of its competitors.

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Read more at the Foundry HERE.

Former Obama fundraiser Rezko gets 10-year sentence

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A U.S. judge on Tuesday sentenced Antoin “Tony” Rezko, a former Chicago fundraiser for President Barack Obama, to 10-1/2 years in prison for corruption and extortion.

Rezko’s conviction was among a slew of guilty pleas that led to the conviction in two trials of former Democratic Illinois Governor Rod Blagojevich and several of his aides.

A Syrian immigrant who earned millions in the real estate and restaurant businesses, Rezko has been imprisoned since his 2008 conviction on 16 fraud and attempted bribery counts.

“Enough is enough. Corruption in Illinois has to stop,” U.S. District Judge Amy St. Eve in handing down sentence to the now-gaunt, 56-year-old Rezko.

Rezko became a minor campaign issue for Obama during the 2008 presidential race. The two had become close friends and Rezko had raised tens of thousands of dollars for the then-Illinois state senator’s successful U.S. Senate and presidential campaigns.

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Read more at Reuters HERE.

Jet-Set Congress

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By Joe Miller.  An interesting story last week in the Washington Post details Senator Harry Reid’s extravagant trip to China this past April.  The trip, which included some Republicans, cost the government at least $66,000 worth of per diem and “miscellaneous” expenses.  Family members and staff also traveled on the taxpayer’s dime.

It’s no small wonder Congress has single digit approval ratings —  Harry Reid can’t seem to find the time to pass a budget, but he has no problem organizing sight-seeing trips to foreign nations.

Not tabulated in the official expense report are the costs of transportation, specifically, the costs of a military jet flying over and back.  The Pentagon bills around $10,000 an hour for such planes.

So figure a round-trip to China is about 30 hours in the air and the bill for the plane — paid out of a special slush-fund for these things — would be about $300,000.   And that doesn’t include the various flights within China once the trip started.

Then there are the substantial indirect costs of countless embassy staff preparing for and serving the large delegation on the ground.

Maybe through the lens of our national $15 trillion debt this does not seem too costly.  After all, our ruling class senators are accustomed to passing trillion dollar spending bills at the drop of a hat.  So what’s a few hundred thousand dollars here and there to see the sights — especially when you don’t have any intention of paying the bill?

And to be clear, this is not just a Democratic Party issue.  Both Republicans and Democrats seem to thoroughly enjoy extravagant trips at the taxpayer’s expense.  They poll at 9%, can’t pass a solvent budget, but as Harry Reid pointed out to a Chinese government official, “having spent two days in Hong Kong and Macau eating as we did, we are all heavyweights.”

Ah, the life of the privileged beltway elite.  They certainly have earned it …

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European Union: designed to exclude democracy, invite tyranny?

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(By Christopher Booker):  So, as headlines scream that vain bids to save the euro threaten us with “Armageddon”, the EU’s ruling elite has toppled two more elected prime ministers, to replace them with technocratic officials who can be trusted to do Brussels’s bidding.

The new Greek prime minister, Lucas Papademos, was the man who, as head of Greece’s central bank, fiddled the figures to enable Greece to get into the euro (against the rules) in the first place – before being rewarded with a senior post in the European Central Bank. He is no more democratically elected than Mario Monti, who will most likely be Italy’s new prime minister and had hurriedly to be made a “senator for life” to qualify him for the job. Monti’s main qualification is that, as a former senior EU Commissioner, he has long been a member of the Brussels elite himself.

One of the few pleasures of watching this self-inflicted shambles unfolding day by day has been to see the panjandrums of the Today programme, James Naughtie and John Humphrys, at last beginning to ask whether the EU is a democratic institution. Had they studied the history of the object of their admiration, they might long ago have realised that the “European project” was never intended to be a democratic institution.

The idea first conceived back in the 1920s by two senior officials of the League of Nations – Jean Monnet and Arthur Salter, a British civil servant – was a United States of Europe, ruled by a government of unelected technocrats like themselves. Two things were anathema to them: nation states with the power of veto (which they had seen destroy the League of Nations) and any need to consult the wishes of the people in elections.

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Read more at the Telegraph HERE.