Yearly Archives: 2008

Quote of the Day:

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“There is no nonsense so errant that it cannot be made the creed of the vast majority by adequate governmental action.”
:::– Bertrand Russell

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Subject: What the bailout means for our future

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The first House vote, in which the Big Bailout failed, showed the power of overwhelming pressure. The second House vote, in which the Big Bailout passed, showed the weakness of waiting to apply such pressure at the last minute.

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Human psychology is such that we always want to wait to the last moment, when a deadline looms, to take action. We must overcome this aspect of our psychology if we are to prevail. If we do not, then we will always lose.

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It really is that simple.

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Things would be vastly different if the same pressure applied to Congress on the Big Bailout had been exerted much earlier to end the government policies that caused the housing bubble.

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Had the pressure citizens brought to bear on the Big Bailout been applied earlier, and for a long period of time, to . . .

Quote of the Day:

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“True, governments can reduce the rate of interest in the short run. They can issue additional paper money. They can open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late.”
:::– Ludwig von Mises (HT: Matt Kibbe)

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Subject: Responsible people get the shaft

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Do you pay your mortgage and other bills on time? Did you buy a house during the boom? If so, you’re about to get the shaft. You’re house is probably worth less than you paid for it, and it will take a lot of payments to get yourself back in the black.

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You’re the person paying the cost for the government-caused housing bubble, and no one is going to bail you out.

Today’s Dispatch is about the continuing bailout saga. What else could it be about? We’re Downsize DC and this is the single-largest, fell-swoop increase in the federal government ever seriously considered. It’s a dramatic — scary! — expansion and concentration of power. We’ll get back to how scary in a moment.

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But first, let’s address a pervasive mood out there. We might lose. Might. But it became evident to me throughout the day last Thursday (9/23) that public sentiment was running so strong against this that we could actually defeat this bill.

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So when the news arrived on Monday (9/27) that the House voted down the bill by just a 12 vote swing, and the rest of the world was “shocked,” “stunned,” and “surprised,” frankly, I wasn’t any of those things. Pleased, yes. Mildly surprised? Sure. But the Downsize DC concept is about massive, overwhelming pressure. And it worked!

Downsize DC is proud to have joined dozens of other organizations in submitting the follwing letter to Senators Chris Dodd and Richard Shelby of the Senate Committee on Banking, Housing, and Urban Affairs:

DownsizeDC.org’s President Jim Babka was interviewed by Brian Trent of examiner.com last weekend, and his insights on the Big Bailout are found in Trent’s piece The Bailout Fight: Politicians Versus the People. Check it out!

Quotes of the Day:
:::“As you may have heard, the U.S. is putting together a constitution for Iraq. Why don’t we just give them ours? Think about it — it was written by very smart people, it’s served us well for over two hundred years, and besides, we’re not using it anymore.” – Jay Leno
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:::“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan
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:::“Government does not solve problems; it subsidizes them.” – Ronald Reagan
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:::Subject: The More Things Change, the More They Remain the Same.
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:::The bailout fight is not over, and the time for action is right now! Since the bankers lost by just a 12 vote swing in the House on Monday, the Congressional leadership has regrouped. In their desperation they’ve decided to violate both the Constitution and ALL the principles of the current Downsize DC Agenda.
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:::The Senate is set to begin debate and VOTE TONIGHT, after the Jewish holiday Rosh Hashanah is over. Rosh Hashanah is the Hebrew New Year, but, as the quotes above indicate, there’s nothing “new” about the games being played on Capitol Hill.
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:::Author G. Edward Griffin wrote about our central banking system, “The name of the game is bailout.” He went on to explain . . .

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“Although national monetary events may appear mysterious and chaotic, they are governed by well-established rules which bankers and politicians rigidly follow. The central fact to understanding these events is that all the money in the banking system has been created out of nothing through the process of making loans. A defaulted loan, therefore, costs the bank little of tangible value, but it shows up on the ledger as a reduction in assets without a corresponding reduction in liabilities. If the bad loans exceed the assets, the bank becomes technically insolvent and must close its doors.
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:::”The first rule of survival is therefore to avoid writing off large, bad loans and if possible to at least continue receiving interest payments on them. To accomplish that, the endangered loans are rolled over and increased in size. This provides the borrower with money to continue paying interest plus fresh funds for new spending. The basic problem is not solved, it is postponed for a while and made worse.
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:::”The final solution on behalf of the banking cartel is to have the federal government guarantee payment of the loan should the borrower default in the future. This is accomplished by convincing Congress that not to do so would result in great damage to the economy and hardship for the people. From that point forward, the burden of the loan is removed from the banks ledger and transferred to the taxpayer.”
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Does that sound familiar? Griffin wrote it back in 1994.
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:::A lawless Congress isn’t new either. Since the bill didn’t pass the House on Monday, the Senate is going to violate the Constitution, and pass their own version of the bailout first. What’s the big deal?

Quote of the Day:
:::”The mystery of government is not how Washington works, but how to make it stop.”
:::– P. J. O’Rourke, Source: Parliament of Whores, 1991
::: http://quotes.liberty-tree.ca/quote_blog/P..J..O’Rourke.Quote.62F0
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:::Subject: Pressure works!
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:::Americans subjected Congress to relentless, overwhelming, resistance numbing pressure. Congress caved. 95 Democrats and 133 Republicans voted to defeat the Big Bailout.
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:::The Downsize DC strategic vision is now conclusively demonstrated. Members of Congress had many, huge incentives to pass the bailout. But public pressure overwhelmed those incentives.

Quotes of the Day:

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“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
:::– Representative Barney Frank, 2003
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HT: Radley Balko at Reason
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Subject: Possible vote today on the Big Bailout

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A deal has been struck. Whether House Republicans will vote for this latest (final?) version of the Big Bailout remains in doubt, but chances are that they will. Nevertheless, it’s up to us to fight to the end, and to give our elected representatives cause for doubt, nervousness, and perhaps fear.

Quote of the Day:

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“Party is the madness of many for the gain of a few.”
:::– Alexander Pope

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Subject: Messages to Congress running as high as 300 to 1 against the bailout

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First the Republicans were for it (the Big Bailout), and then they were against it. What happened?

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What happened is YOU, and others like you, pounding on Congress to NOT pass the Big Bailout.

Quote of the Day:
:::“At this point, Congress is being asked to support an uncertain entity, costing an uncertain amount of dollars, for an uncertain duration – a decision that will have implications for generations to come and requires absolute certainty.”
:::– Congressman Jeb Hensarling, TX, and Chair of the House Republican Study Committee

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Subject: This would be simpler than a bailout

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A few simple words in an arcane regulation may be a major cause of the current financial “crisis.” Removing this regulation would be simpler and cheaper than the proposed bailout.
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:::Financial Accounting Standard 157 is a regulation imposed on businesses by the quasi-private Financial Accounting Standards Board (FAS). This rule is also incorporated into the regulations of the IRS and is further enforced by the SEC and the FDIC. FAS 157 requires businesses to mark down assets to the lowest price for which similar assets have been sold in the market.

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The jargon term for this regulation is “mark-to-market.” Mark-to-market forces good securities to be valued at the same price as bad securities.