More drivel from CNN and Daily Kos
You ought to read this drivel over at Daily Kos.
Political rallies are intended to energize those who come to the rally.
When Obama draws huge crows the media calls it inspirational. When McCain and Palin (Mostly Palin) draw large crowds it is incendiary.
Good grief.
Mike Sylvester
A Report From The Obama Rally
Kristina Frazier-Henry attended yesterday’s Obama Rally at the State Fairgrounds and was kind enough to write up her thoughts and reaction to the experience. Check it out below:
Senator John McCain embraces socialism during last night’s debate
John McCain is, and always has been a moderate Republican. He would have to be considered pretty close to the political center by any objective person.
Last night Senator McCain did what he could to ensure that he is defeated in the upcoming election. Senator McCain keeps trying to reach out to moderates and Democrats when he should instead be focusing on conservatives.
His commentsabout bailing out homeowners who cannot afford to pay their home mortgages sounds like something a socialist or fascist would advocate rather then a conservative.
He wants to take 300 billion dollars of the 700 billion dollar bailout package and use it to bailout out certain home owners and write off a portion of their mortgage principle and negotiate a 5% interest rate fixed rate loan.
In other words he wants to reward people who made bad decisions by borrowing money we do not have and using that money to pay down the principal of these mortgages and refinance them at lower interest rates then most Americans have.
Good grief.
Mike Sylvester
P.S. Yes, I am voting Libertarian for President. Bob Barr has my vote for certain…
Class Envy
Class Envy and the tax code
You can tell a Federal election is around the corner due to the discussions about making the middle class pay less in taxes and further subsidizing the poor - ensuring that not only do they pay no Federal income tax they also get a significant subsidy via various refundable tax credits.
These conversations are interesting; however, they are truly meaningless unless they are put into context.
What is middle classed? What is poor? What is rich?
Most often economists (and politicians) use median income to determine tax policy. Our Federal income tax code is designed to tax those who make more money at higher rates while at the same time subsidizing the poor by paying them more back then they pay in Federal income taxes.
Interestingly enough the Indiana tax code is designed to tax people fairly evenly no matter what their income. In Indiana your exemptions will exclude a small amount of income from tax; however, once you get above that amount everyone is taxed evenly in Indiana.
Another explanation of the current “banking crisis”
Please take the time to read this explanation of how the current mortgage crisis occurred.
I do not agree with all of this post; however, it is an interesting take on the problem; however, it ignores the role of Fannie Mae and Freddie Mac and how they caused many of the problem and it also ignores the fact that our politicians lowered the lending standards.
It is worth a read and is an interesting take on the situation.
Mike Sylvester
Harry Reid thinks we are stupid
I listened to Harry Reid and the speech he gave just before the vote on the Senate version of the “socialist” bail out bill tonight. In that speech he told Americans that the package limited the pay of Wall Street Executives.
He is stretching the truth so far that he lied.
You can read the bill yourself at Foxnews.com. Please skip down to Section 111. Executive compensation and governance.
One of the things that many Americans have been outraged by is the fact that the Wall Street executives and the executives of Fannie Mae and Freddie Mac have made billions of dollars in the last few years.
I have heard a large number of Democrat and Republican politicians claim that this bill will prevent those executives from profiting from this bailout; in fact, I heard many say that they were going to go back over the last couple of years and “claw back” or take back some of those excessive bonuses.
They lied.
This bill does not have any “claw back” provisions and it does almost nothing to limit executive pay.
Read it for yourself and vote accordingly in five weeks.
The Senate version of this bill is even worse then the House version that failed. The Senate added one provision that may be helpful, they are increasing the FDIC insured limit to $250,000 per account. I think this is a good provision as long as the premiums go up and it is revenue neutral.
The Senate added many terrible things including:
- A lot of pork barrel projects.
- A lot of unrelated spending.
- A contentious portion that changes the rules on health insurance and mental health or addiction.
- A large number of tax provisions and “extenders”
Worse yet; there is no provision in this bill to offset the spending. The Democrats promised “pay as you go” and boy did they lie. This is going to increase next year’s budget deficit to nearly one trillion dollars next year if it is accounted for correctly by The Congressional Budget Office. I cannot imagine a one trillion dollar budget deficit; however, these idiots are planning on doing it…
As far as the vote itself goes it was a disappointing 74 to 25 victory. The Party breakdown was:
- The only Independent voted against it.
- 18.4% of Democrats voted against it. ( 9 of 49)
- 30.6% of Republicans voted against it. (15 of 49)
Both Indiana Senators voted in favor of this monstrosity.
McCain, Obama, and Biden all voted in favor of it as well.
As has been well documented on this blog I have been wavering between voting for the Republican Presidential candidate John McCain and the Libertarian Presidential candidate Bob Barr.
This has clinched it; I will be voting for Libertarian Bob Barr.
Mike Sylvester
What are the “risky assets” worth?
This is the 700 billion dollar question that no one has answered.
Repeatedly I have heard the Secretary of the Treasury say that no one knows what these assets are really worth since they are bundled into complicated packages. Yet, he wants to buy them with 700 billion dollars that will have to be borrowed which will increase the National Debt. The question is how much are they worth?
The two most recent batch of “toxic assets” were sold at a fire sale for 22 cents on the dollar and 27 cents on the dollar. Mark Souder said on WOWO that he talked to a local banker who felt that in general toxic assets are worth 95 cents on the dollar.
I am not sure what they are worth and the truth of the matter is that each batch of “toxic assets” would have to be individually valued and the valuation will be very difficult.
That being said there is no way these “toxic assets” are worth 95 cents on the dollar and I will show you why.
Alternate House bailout plan from a few Democrats
A few House Democrats have unveiled an alternative plan to the “socialist” 700 billion dollar bailout. This plan is not perfect; however, it is much better then the plan the Bush Administration and the Democratic and Republican leaders of Congress came up with. Far better.
1. For financial institutions require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions rather then using mark-to-market accounting rules. I feel the wording on this would have to be tightened up; however, it would work.
2. Require the Securities and Exchange Commission to restricting naked short sells permanently. I think I am in favor of this; however, I would have to research it further.
3. Require the Securities and Exchange Commission to restore the up-tick rule permanently. I think I am in favor of this; however, I would have to research it further.
4. This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount “borrowed” as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
This provision is not something I would normally favor; however, it is far better then purchasing 700 billion dollars of risky assets that no one wants. I think this is an interesting idea and I think it could work.
5. Increase the FDIC limit from $100,000 to $250,000. I am in favor of this as long as the fees are increased to keep the fund solvent.
This solution comes from a few House Democrats. It is not the plan I would choose; however, it is “head and shoulders” better then the “socialist” 700 billion dollar bailout bill that the Bush Administration along with the Democratic and Republican leadership came up with.
I hope the conservative House Republicans come up with a plan soon as well.
The Democrats who came up with this plan should be congratulated because they came up with something far better then the bill that was voted on yesterday in The House.
I still cannot believe the “rush to judgment” that the Bush Administration along with Democratic and Republican leaders in Congress insisted on. It is just mind boggling.
Mike Sylvester
More on Mark Souder
He has a radio interview on WOWO that you really should listen to. I am not sure how long WOWO will keep the link up for, so I suggest you listen to it soon.
Some highlights (My comments are in bold):
Mark Souder did not think the bailout vote would be brought to the floor unless they had enough votes to pass it. Either he was wrong or people changed their votes.
Mark Souder said there was “minimal risk and taxpayers may come out ahead.” This is laughable at best.
Mark Souder said that “most people believe assets are 95 cents on the dollars. Warren Buffet is buying at 60 cents on the dollar. I would like to meet some of these people that believe that the risky and bad mortgages the bailout would direct the Treasury Department to buy are worth 95 cents on the dollar. Mark Souder is the first person I have heard say that. Please realize that some of these baskets of bad mortgages have greater then 50% of the homes in foreclosure already. There is no way that all of these mortgage assets are worth 95 cents on the dollar. There is also no way that the average value of these bad assets are worth 95 cents on the dollar either. If they were worth 95 cents on the dollar the banks would not be in the situation they are in.
Mark then went on to say that he supports the bailout because he wants a “Recession not a Depression.”
Later in the radio interview Mark Souder clarified that his figures (60 cents and 95 cents described above) were based on a local banker who in turn made them up since no one really knows what these assets are worth. I doubt that any local banker could possibly believe that a portfolio consisting of sub prime or alt-A loans that was written in 2005 or 2006 and had 50% or more of the houses in foreclosure could possibly be worth 95 cents on the dollar. I would believe that a banker MIGHT beleive that SOME of the baskets of bad loans are worth 95 cents on the dollar. If he does believe that the bad mortgages and loans that the banks want to get rid of are worth 95 cents on the dollar; I hope my money is not deposited in that bank!
I do not think Mark Souder is a fiscal conservative. I do not think he believes in smaller Government. I do not think he understands the value of sub-prime and alt-A loans that are bundled together.
Mike Sylvester
Nancy Pelosi likely “sinks” bailout Bill while trying to get it passed
Before the massive bailout vote occurred Nancy Pelosi asked for one minute to address the House. She instead took over five minutes and delivered a vicious, in-accurate, partisan attack on Republicans in general and the Bush Administration in particular. She delivered this speech before a vote she considered critical and that she has repeatedly said must pass and in fact she has repeatedly said that it must pass and the she insists on having 80 - 100 Republicans vote for it because she did not want the bailout bill to be “blamed” on Democrats.
Many people, myself included, feel that Nancy Pelosi likely irritated enough Republicans to where the vote failed.
Realize that Nancy Pelosi did not ensure the bill failed on purpose, she just made such a partisan and inaccurate attack that she killed it by accident.
I am glad that she irritated many Republicans and killed this “socialist” bill.
I first heard the audio from Nancy Pelosi’s speech today on the Pat White show on WOWO.
I am not a historian; however, I think it very likely that Congressional History was made today. I imagine it is the first time that a high profile bill has failed that had the support of:
