By Michelle Seitz

Republicans in Congress, who are being closely watched by their constituents, stood their ground and killed the bailout bill for the “Big Three” automakers. Finally, a victory against corporate welfare; and Republicans are acting like conservatives again! Not so fast…

Until today, the Bush administration was opposed to using funds from the Troubled Asset Relief Program (TARP) to aid the ailing auto companies according to a Bloomberg report. “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.” This statement is indicative of the Bush administration’s position according to Treasury spokeswoman Brookly McLaughlin.

The last line of President Lincoln’s Gettysburg address states: “and that government of the people, by the people, for the people, shall not perish from the earth.” It seems that the people no longer have a voice in their government. Our elected officials spoke on our behalf, yet President Bush feels he has the power to override the decision.

Bush’s use of the term “czar” is very disconcerting. His administration has presided over government intervention at extraordinary levels in every aspect from national security to the most disturbing involvement in the economic sector. The administration’s intervention in the financial sector has led to forced partial nationalization of nine of America’s largest banks. Billions of dollars have been given to politically connected institutions to jumpstart and continue peculiar monetary policy along with the continued abuse of credit.

As for the auto industry, the government takes a stake by way of the bailout and will appoint the industry with a “car czar.” Why the term czar? Is there an advantage to using the governing style of former Russian emperors? Just who will this car czar be, and what gives him/her the expertise in overseeing such a transaction? A business does not have to look any further than the federal government for examples of gross mismanagement. With the federal debt approaching $11 trillion and deficits that are likely to surpass $1 trillion, the government isn’t the institution to seek cost structure advice. Therefore, how does a person appointed by a President who has presided over the worst monetary policy arguably since the Hoover and FDR administrations going to get the “Big Three” back on track again? Answer: It won’t happen.

We loan the industry the money so they can pay their bills, then what? Without the major changes that I and other writers have outlined in previous columns, the American taxpayers will be at a crossroads again shortly – this time with a $15 billion sunk cost.

The events that have transpired over the latter half of 2008 have fiscal conservatives and free-market advocates in frenzy. True conservatives know that crisis is a friend of the state. Crisis and people’s desperation give the government the power to overrule the will of the people in order to experiment – experiment with trillions of dollars as if it were pennies. As Herbert Hoover laid the groundwork for FDR, George Bush has laid the groundwork for Barack Obama. George Bush has set up the framework for the largest governmental intervention experiment in possibly all of America’s history, as I believe it will surpass the New Deal.

For those fiscal conservatives who still think they have representation in the Republican Party, it is unwise to have blind faith. Don’t be fooled by temporary victories such as the Senate’s. There is no need to be frustrated with Barack Obama or the Democratic Party. Obama will do what he was elected to do and execute the principles his party has always stood for and conservatives have always opposed. After all, it’s not his administration who is agreeing to appoint “car czars,” approved government handouts to select income groups passing it off as “fiscal stimulus” and handed out billions of dollars to irresponsible companies as if it were pocket change.

Sadly, the world will have to see the fallout first before it sees the light…

Click the image for the large version.

In September our great nation was faced with a financial crisis not seen since the 1930’s. In response to this financial crisis, President George W. Bush called for a bill to save our financial markets. On September 28, 2008 America passed the “Emergency Economic Stabilization Act of 2008”. This bill provides over 750 billion dollars of tax payer dollars to attempt to restore credit and regain confidence in a downward economy that has grown to epic and global proportions. In essence the bill will allow the federal government to buy into the financial system through the ownership of preferred stock. I firmly stand against this action and have concerns about the federal government buying ownership into the financial district.

First lets go over how all this happened. In a nutshell this all leads back to the "Community Reinvestment Act" which forced banks to comply with Fannie Mae and Freddie Mac by giving out loans to people regardless of whether or not they could pay for them. Fannie and Freddie, partly owned by the federal government, offered to back these bad loans if any of them were to foreclose. With the government backing these loans, banks felt they had nothing to lose since they had to comply with the federal mandates or face costly lawsuits. So banks got creative with how they issued loans (Arm, interest only, no money down, etc.). Fannie and Freddie continued to make money as long as home values increased and as long as more loans were issued. The more loans the more money Fannie and Freddie made. Fannie and Freddie then bundled these mortgage loans into "mortgage backed securities" and sold them as investments to other banks who bought them. Next came high oil prices and inflation started to rise. Interest rates went up and more people started to foreclose. With too many foreclosures at one time, Fannie and Freddie couldn't back these loans and the downward spiral continues to this day.

What happened was not the result of the free market or deregulation, as the left would have you believe. What happened had everything to do with the fact that a bad government policy failed. Fannie and Freddie removed an important element of capitalism…..the element of risk. When risk is removed there is no fear and therefore there can be no failure. Risk is an essential part of capitalism. The old saying “the higher the risk, the higher potential for return” still holds true today as it did hundreds of years ago. In this case there was no danger in giving out risky loans because banks were assured they would be backed by the government. For example, let’s say you and I go to a casino, and I force you to play the slot machines. Then I tell you not to worry because if you lose any money I will cover your losses. Are you going to behave differently in that casino if I tell you I am going to back your gambling that day? Of course you will, and our financial markets are no exception.

So what does our government do? They buyout Fannie and Freddie so they are completely owned by the federal government, and bailout our banks by buying shares of preferred stock as collateral. Our federal government failed us by trying to make everything fair instead of letting the market determine who can pay back a loan. In a normal market banks all take a reasonable amount of risky loans, but too many can jeopardize their business. The federal government failed to regulate Fannie and Freddie and failed to enforce the existing laws we already have in place. As a result the federal government now has complete ownership of Fannie and Freddie, as well as a substantial stake in our largest banks.

So what should our government have done? For starters our government had no business mandating companies to take bad loans in the first place. I would love to see everyone own a home, but as we have seen too many people owning houses they cannot afford can lead to a disaster. I would like to see the government dramatically change the “Community Reinvestment Act” and reduce the power Fannie and Freddie have in the marketplace. Next, I would like to see the government stay out and not offer any tax payer money to financial institutions. However, as I stated above our government broke capitalism so now our government believes they have to come in and fix it. I am against the government owning any shares in our financial sector. If it is decided that federal help is mandatory then I would rather they issued bonds or loans coupled with legislature that completely changed the way Fannie and Freddie operate.

As a free market capitalist I am weary whenever the government buys into the private sector to “help out”. Usually when the government gets involved with anything they cause more problems than they solve. When this is all over is our government going to sell those shares back and get out of the private sector? That remains to be seen, but I have my doubts. What voice is our government going to have now that the government has a direct steak in the financial world? What kind of new regulations are going to be put in place while they are partial owners? Is the government going to mandate how these companies invest their money? I don’t recall hearing GW Bush say a bad government policy had a hand in causing the financial crisis. As other industries fall on hard times as a result, is the government going to bail them all out? The fact is we do not have the money to subsidize the private sector, and our federal government shouldn’t be in the business of running it in the first place.

Sources:
http://online.wsj.com/article/SB122398468353632299.html
http://money.cnn.com/2008/09/28/news/economy/Sunday_talks_bailout/index.htm?cnn=yes
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/

Originally posted at RedState

If we've finally learned to cool our heels and drop the fingers, conservatives are beginning to realize that we have sucked it up this decade. But one thing is certain. The accumulation of frustration that has been building up since '07 was pretty clear in the loud of chorus of boos during John's concession speech on the night of the fourth. But wait. Are we quick to say who they were booing? Sure, the mention of 'The One' probably triggered an instinctive backlash of muddled curse words and vocal boos and hisses. Yet, who's to say there weren't those in the crowd who were just a teensy peeved at McCain? A pretty common diagnosis of our failure was an unpopular incumbent, a messianic challenger, yada yada yada. They say Obama's timing was right; that he would have won regardless our chosen candidate. But oh no! It was the BUSH factor! It must have been the President's fault! But... has anyone bothered to realize that it was in McCain's full capacity to kick Georgie out of the picture?

"I am not President Bush."

In theory, if all Americans knew what we conservatives know, that sentence alone would have been enough for there to have been an ah-ha! for the voters, let alone the grassroots. But as we know, Americans don't know that and tend to be attracted to very long coattails.

The President's ideological platform (and no, I'm not talking about the Bush doctrine) was for certain sound enough (or we wouldn't have reelected him in '04). Sure, W didn't run as conservative a campaign as HW did, but did that kick us in the arse? The very vast majority of the perceived dissatisfaction of our President has been induced by arbitrary incidences of alien origin. In other words, the platform didn't screw Bush; we know that much. Black Tuesday screwed Hoover. Watergate screwed Nix. The Iranian hostage crisis screwed Carter (well, he was already screwed). But in this case, like Obama's uncanny power to do magic, it seemed as if the real Bush "doctrine" disappeared. If at all, the President's domestic prowess seemed to be nonexistent this election cycle.

McCain had an open kill here. He really only had two options: renounce George completely, or strengthen his principles while defending the President in subtlety. It's evident he didn't choose the latter. The smart thing for John to have done would have been to tell the voters that he would not run a campaign of 'what-ifs'. They really are nothing new, but politicians these days seem unwilling to detach these 'what-ifs' from core party platforms.

To sum things up, an ideological campaign would have given John a win. His arbitrary one cost him it.

So yes, I just said it. It was not Bush's fault.

From this previous Presidential election we can conclude the following:

Approx 64 million people said yes to Barack Obama’s and no to John McCain’s campaign message.

Approx 57 million people said yes to John McCain’s message and no to Barack Obama’s message.

With approx 300 million people in the United States and 200 million being eligible to vote….we’re seeing 80 million people not saying anything.
Now I’m sure some of these did not see a message that resonated with them enough to support a candidate, but then there are so many who just do not vote.
Add on top of that the large amount of new voters who were drawn out and the number is rather staggering.

With the majority of the media this campaign season being so one sided and international media also being so one sided it is very tough to get a clear picture of each candidate without taking the time to do your own research.

When speaking with my brother who lives overseas after the election he stated he thought Barack Obama was the best candidate. When asked how he came to this decision from so far away he stated because ‘McCain is a finger on the trigger, ex war hero who has just towed the line with Bush’.

Naturally I was taken back by this so I delved a little further.

‘Have you ever heard of William (Bill) Ayers?’ I asked
‘No’
‘Have you ever heard of Jeremiah Wright?’ I asked
‘No’ again was the answer.
‘How many planes has McCain crashed in his lifetime?’
‘Five’ was the answer
‘How much has Palin spent on clothes for the campaign?’
‘It was over $150,000’
‘Did you hear about her banning books in an Alaskan library?’
‘Oh yeah we heard about that’.

Naturally I was shocked. Not because of the obvious one-sidedness of the British media but the fact my own brother had fallen victim.

Living in the US and being subject to all forms of media (TV, radio and Internet) with this campaign I’d been open to all sides. In the UK you only really have the news media to go on.

Again using the UK as an example I found a man online who was told to take down his Union Jack (British flag) because some minorities in the area were offended and had complained. Now I know the UK has changed with the incoming minorities and the traditional culture being severely diluted…..but this is just ridiculous.

How these people in the UK are not revolting over being told they cannot fly their own flag is beyond me.

This all boils down to change. We’ve heard it a lot in the last months in the good ol’ US of A….but what’s it all about.

Well obviously the UK has changed….and for the British people it appears this change is not good for them and their values and culture. But this change has not happened overnight…this has been small gradual change.

You get the occasional person who is upset at something but rarely speaks out so it seems, thus it continues. Tiptoeing onward and upward until you look back and cannot recognize what it used to be like.

Coming back across ‘the pond’ as we call it, the US is heading in the very same direction.

Granted the country is still much younger, change is still happening and I believe it is not for the better (regardless of what those elected officials say).

I asked someone (who shall remain nameless) during the primaries what they thought of Obama as he was a relative unknown.

‘He’s an Arab!’ was the response.

No matter what proof I stated the only response I got was ‘He’s still an Arab!’

It has been proven time and time again that a large portion of the population do not understand the basic functions of government and who was indeed running in the campaigns. This is either through a lack of active involvement or just a lack of caring as politics was something they were never involved in. They hear one rumor (regardless of its truth) and that’s their opinion.

However what is most troubling about this group of people is that the Obama campaign was able to draw them in, still without an understanding of the campaign and the government.

A fantastic study was done during the closing weeks of the election and details can be found at http://www.howobamagotelected.com/

Be it the Republicans or the Democrats who draw in these new voters it is very dangerous to vote while not fully understanding why you are doing it. Not dangerous to the individual, but dangerous to the country.

In the US you can live life, go to work and watch TV without coming across politics.
Not just Presidential politics either, but local and state politics as well.

Unless it’s a scandal worthy of regular news there is not much coverage on regular TV.

Too many Americans are (as I like to call it) ‘asleep at the wheel’. A voice is only heard when it effects them directly.

Example:
For years this country has not had an energy policy. The US continues to import more and more oil thus relying on foreign nations. This has not only been dangerous but damaging to the US economy by sending huge sums of money overseas.

However not until gas prices started hurting the average person were large amounts of voices heard.

Action could have been taken decades ago but the masses remained silent as they were not directly affected.

Now cries were heard, the offshore oil drilling ban was lifted and thanks to a looming recession the price of oil has plummeted from $150 to under $50 a barrel.
Still there are a huge majority of people who do not understand where the US gets its oil from. A poll conducted by EnergyTomorrow.org shows that many people while upset over the recent high energy prices still do not have a firm grasp on the reasons for it and where the US in fact gets its oil.

http://energytomorrow.org/mediaroom/?id=39&type=v

And what do politicians want to do? Reinstate the offshore oil ban and put more taxes on the price of gasoline.

An energy policy would help solve this issue from returning in the future, but where have the majority of voices gone? Back to their lives as they are no longer being bled dry at the pumps. While the issue remains unresolved…..the ‘huge’ voice has been lost.

Come summer 2009….the prices will be back up and people will once again cry out.

Why is this?

Why do so many Americans not care until it’s too late?

Why does it take so much for the majority of people to act?

Are they just lazy? Do they not care? Are they so wrapped up in their lives to bother?

It’s a troubling and unanswered question which will affect the future of this great nation.

Another current issue is the economic crisis.

Money has been so readily available that in 2007 the US as a whole spent more than it earned. The traditional ‘if you can’t pay cash you can’t afford it’ has long since vanished.

People as young as 18 are able to borrow almost obscene amounts of money with very little proof of being able to pay it back.

Sign up for this credit card and get a free t-shirt.

It doesn’t matter that you have no income….we use your parents as backup.

It all comes down to not being able to afford the item itself, but to afford the payments.

Normally a $50,000 car is out of reach, you’d never have that kind of money laying around. But $400 a month for however many years…..that’s doable.

This then expanded in the 1990’s to lending for houses.

It’s OK that you can’t afford the house under the ‘conventional’ means of borrowing money. We’ll lend you more than the house is worth at a special rate because even if you default the government will back up the mortgage. Enter Fannie Mae and Freddie Mac.

What they either failed to tell the borrower or the borrower was so dazzled at the prosperity of owning a home that they didn’t care was that the payments will increase after 5 years.

To me its just common sense…..if they can’t afford the house by conventional means then what’s going to happen when the payments adjust?

And even with government backing, what’s going to happen when everyone or even a small majority who has these loans defaults?

Now this housing crisis can be traced back to the Democratic Party and the Community Reinvestment Act started by Carter and revitalized by Clinton.

Both Bush and McCain in the last 5 years signaled the warning bells of the coming disaster but nothing was done and now the Democrats are pointing the finger at ‘Bush’s failed economic policies’

Granted more could have been and should have been done, but once again the masses asleep at the wheel hear Bush being blamed and that’s it….its his fault.

Thus those uneducated people all fall on the side of Obama without knowing the truth and of course…..why should they tell them the truth?

Come back to less than a month ago and to ‘solve’ this economic crisis the government is bailing out private industries.

Investment companies with so many of these dodgy mortgages on the books – they need a bailout otherwise they’ll fail and cause more havoc.

The big 3 auto manufacturers who lost sales due to the high gas prices are on the verge of failing – they need a bailout otherwise they’ll fail and cause more havoc.
CITI Bank who has so many of these dodgy mortgages on their books is failing – they need a bailout otherwise they will collapse.

This bailout bill offering a total of $700 billion of tax payer money was signed in to avert this huge crisis. If this was not put through immediately the whole economy would collapse. Congress goes on a two day vacation between this speech and the votes however, figure that one out.

Over a month and over $1 trillion later the stock market is still in roller coaster mode, more industries are coming to Washington with their hands out and we the tax payer are on the hook for these enormous amounts of money.

Not only that, but congress has now pledged over $7 trillion to save the economy.

Where was the vote on that?

Where are the voices from the masses?
Well people are not directly being affected. Taxes have not gone up to cover this money and people are not being forced to spend much more in their day to day lives. Now when it comes to our children and our children’s children…..how loud will their voices be?

There are much more efficient ways to resolve this crisis created by government. But government appears to just be throwing money at the problem.

Its OK, it’s not their money…..they don’t have to pay it back…we do. They’re just printing more. Where are the voices?

When it comes to those asleep at the wheel losing their jobs….who will they blame?

Blame Bush…it happened on his watch.

Blame Obama…..but he just inherited it from Bush.

What do you think the one-sided media is telling those people?

If they knew the truth…..do you think they would have voted the way they did?

How are they going to learn the truth when all they get is one side?

What is going to happen if we all just sit back and let ‘someone else’ deal with the problem?

Well right now that someone else is the US government.

This economic crisis was caused by government, they are now being left to fix the problem they caused and they are grabbing power and nationalizing industries in the process.

If your house was burgled, your possessions stolen and you knew who stole them, would you let that person head up the investigation? Of course not.
But those who knew what was happening in the mortgage industry, said to the American people (many with their life savings invested in these companies) that everything is fine are the ones now saying they are solving the problem.

Frankly I don’t trust them and you shouldn’t either.

Once again government is not the answer.

The government manipulated the free market system, they have literally destroyed the free market system and they are now spending trillions on dollars to solve the problem they say is the fault of the free market system.

We need to wake up.
If you’re asleep at the wheel too long….the vehicle will crash.
...and we're already a long way off the road.

-Tony Leach