The
crushing lack of leadership, underscored by the absence of even a
rudimentary understanding of the factors that contributed to the
current economic crisis, begins to unfold in the wake of a
demoralizing vote by the U.S. legislature for a $700-billion bailout.
The House of Representatives originally voted it down, obviously
holding out for earmarks from the Senate. Incredibly, the Senate
obliged, attaching an additional $125 billion worth of such bribes to
ensure the House majority vote in favor of bailing out Wall Street,
and indefinitely indenturing future generations with impossible debt.

At
a recent dinner for the Quad Cities Home Builders Association,
Senator Chuck Grassley was asked where the government was getting the
$700 billion it intended to use for the bailout, and if we had to
borrow it, what interest rate would we be charged. He claimed he
wasn't sure, but said that he thought the Federal Reserve would
profit greatly, additionally surmising that the Fed would contribute
a portion of its profits back to our treasury. Contribute? What
evidence he has for this can only be guessed. But the mere fact that
this answer sufficed in Senator's Grassley's mind is indicative
of how completely at sea this legislator - along with so many of
his peers - is.

So
far, $250 billion has been allocated to the nine largest banks in the
nation, even though some of the banks declined the funds, stating
they had no need of them. After receiving $25 billion of the $250
available in the first round of giveaways, Bank of America's CEO,
during an interview with 60
Minutes
on October 19,
explained that his bank was pressured to take the money to help
disguise which of the nine banks were actually failing. How is this
deception any less fraudulent on the part of the Treasury? Even more
incredibly, there is no mandate attached to the $250-billion
allocation that requires the nine participating banks to re-loan any
of the funds they get. The money could be used for acquisition of
weaker banks, or to purchase smaller banks in an effort to
consolidate, or for any other reason the banks see fit. The first
round of bailouts, in other words, does not contain a single dollar
of financial assistance for Main Street's homeowners, but instead
fully funds the recovery and protection of much of Wall Street's
ill-gotten wealth.

Is
it any wonder that the world's financial markets are not
rebounding? All the bailouts in the world can't restore confidence
in a system corrupted by (a) incompetent greed (most of Wall Street),
and (b) competent greed (central banks such as the Federal Reserve,
whose insatiable appetite for more power through financial control
guides a global agenda that requires unilateral asset grabs such as
the one currently occurring, and not unlike many other such asset
takeovers throughout history).

Smart
money knows that the fox is watching the hen house. The fox
(Congress) is as culpable for the economic crisis as any of the Wall
Street players in its willingness to be manipulated by lobbyists and
special interests. Add the glaring absence of regulatory
oversight/enforcement undermining the recent $700-billion subsidies
to the reckless tolerance for violations of current, enforceable
regulation, including infractions against standard accounting rules
and policies, and voilà:
You have a formula for further failure. Mixed together, the resulting
formula represents the antithesis of market confidence grounded in
mistrust and across-the-board disdain for the current leadership.

This
Congress has forsaken its credibility. Its promise of vigorous future
transparency is laughable coming from a legislature (on both sides of
the aisle) whose part in eroding capitalism via its inequitable
favoritism of special interests in the form of a $700-billion bailout
makes the 110th Congress a particularly heinous corrupter of
capitalism, and our republic for that matter. In light of this recent
bailout, the transfer of constitutional authority to the Federal
Reserve to coin money in 1913 fulfills Woodrow Wilson's rueful
prediction that "I have doomed my country." By ceding that
authority to the Fed, it is arguable that the legislation really did
doom capitalism as an economic model.

Soon
the Federal Reserve will cherry-pick assets for its engorged
portfolio, while aiding Secretary Paulson in striking deals for
taxpayers that are woefully deficient compared to the same deals
being struck for the Warren Buffetts of the world. Buffet will
receive 10 percent on his newly acquired equities, along with
warrants against future failure. Taxpayers, on the other hand, will
get less than 5 percent with no warrants, or weakened ones at best.
My prediction is that, down the road, the Fed will buy back these
same equities from us at discounts it never would have received in
the market. Meanwhile taxpayers will still be paying the Fed interest
on portions of the $700 billion it borrowed from it to buy the
equities in the first place.

There
is only one recourse left for voters. We have an imperative duty to
one another, and to our heirs, to make sure that the oversight left
to a "future Congress" referenced in the $700-billion-bailout
legislation is composed of mostly new members. We must clean house,
literally and figuratively, by voting in the slate of challengers to
this deficient Congress wherever possible. An unprecedented sweep of
new men and women must be given an opportunity to mitigate the harm
done by this current Congress in its collective ignorance and willing
haste. Too many in our Congress are career politicians, more loyal to
their lobbyists than to their constituents. This sorry truth is
highlighted by the campaign finances of both major presidential
candidates (McCain and Obama), evidenced by their combined
expenditures totaling nearly $1 billion. While the collected dollars
are not as obscene, the campaign finances for state and federal
legislators tell a similar story when compared with voting records.

Each
state elects two senators, whose terms are six years each. However,
because their seats are up for election in alternating years, only
one senator per state is up for reelection this year. In Iowa, Chris
Reed (R) challenges incumbent Tom Harkin (D). In Illinois, Dr. Steve
Sauerberg (R) challenges incumbent Senator Dick Durbin (D).

It
is no surprise that Senator Harkin voted in favor of the $700-billion
bailout, considering investment banker Goldman Sachs is his third
largest contributor, according to Project Vote Smart, a nonpartisan
reporting agency that records data for the nation's elected
officials, both state and national. The public can look up how an
elected official voted on a specific bill, or get a summary of how a
legislator voted over time respective of a specific issue. It is an
invaluable resource to learn the facts about your elected
representatives. Vote-Smart.org (via OpenSecrets.org) also lists
campaign contributions by the five largest contributors, as well as
by industry of contributors. It is easy to discern your legislators'
spheres of influence when you know whom his/her largest contributors
are. A lot of dots get suddenly connected.

In
Senator Harkin's case, not only is Goldman Sachs listed in his
top-five contributors, Securities & Investments comprise his
third largest industry of contributors. Senator Harkin
enthusiastically supported the bailout.

Senator
Durbin also unabashedly supported the $700-billion bailout, and the
Securities & Investments industry is his second-highest industry
contributor. Interestingly, Senator Durbin's third-largest
contributor is Citigroup.

As
for some of that pesky dot-connecting: It was reported in The
Guardian
on October 18
that banks receiving bailout funds are ignoring compensation caps.
"Financial workers of Wall Street's top banks are to receive pay
deals worth more than $70 billion, a substantial proportion of which
is expected to be paid in discretionary bonuses, for their work so
far this year." Among the worst offenders are Goldman Sachs and
Citigroup, each of whom received $25 billion from the first
$250-billion subsidy. "The sums that continue to be spent by Wall
Street firms in payroll, payouts, and, most controversially, bonuses
appear to bear no relation to the losses incurred by investors in the
banks. Shares in Goldman Sachs and Citigroup have declined by more
than 45 percent since the start of the year." Citigroup is claiming
$25.9 billion in salaries and bonuses, while Goldman is claiming
$11.4 billion.

The
House of Representatives is broken up into districts. For the Quad
Citians, the Iowa side is District 1; the Illinois side is District
17. In Iowa David Hartsuch (R)
challenges incumbent Representative Bruce Braley (D). In Illinois,
Representative Phil Hare (D) is running unopposed. This is
disappointing considering Hare is also a staunch supporter of the
bailout.

Braley
originally voted against the bailout, but was essentially bribed by
the $125-billion earmarks that also bought the vote of most of his
peers for a final vote in the House of 268-148 that sealed our fate.
He claimed that initially calls came into his office 100-1 against
the bailout, but as the week progressed that ratio dropped to 50-50.
Braley told reporters during a Q&A session shortly after the vote
on October 3, in defense of his vote supporting the bailout: "I
made a decision that was in the best interest of Iowans." However,
a small industrial manufacturer reported to the Reader
that he was told that very morning by an aide in Braley's office
that the calls were coming in "200-1" against the revised
pork-laden bailout.

In
November, voters have a chance to effect real change, while sending
the loudest possible message to politicians across the land that we
have had enough. Enough! Watch Americans demonstrate the true might
of the people's vote this election by overhauling the U.S.
Congress. The 110th Congress has proven its members are unfit to
serve in these trying times. If the 111th Congress is made up of
incumbents' challengers, each will arrive in Washington with a
clear mandate from an American electorate dedicated to taking this
country back.

 

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