Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Bailouts

Monumental Hubris in Claim of Taxpayer Victory in GM Bailout

 

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, December 11th, 2013:

In Treasury Secretary Jacob Lew’s fawning, obsequious, genuflecting announcement that the president had singlehandedly saved western civilization from a cataclysmic economic disaster, he said that by taking a loss, taxpayers actually scored a victory:

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US Treasury sells the rest of its GM shares at a loss, claims taxpayer victory

Treasury Secretary Jacob Lew announced on Monday afternoon that his department had sold the remaining shares of GM that it acquired following the forced bankruptcy of the auto giant in 2009, and made the $10.5 billion loss sound like it was a victory:

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Could a Professional Wrestler be the next Senator from Tennessee?

This article first appeared at McAlvany Intelligence Advisor:

 

In gearing up for the 2014 Senate election in Tennessee, the Tennessee Alliance Tea Party & Liberty Groups announced in its newsletter last week that current Senator Lamar Alexander was ripe for extinction:

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Staff Report from the IMF Blames the European Union for Mishandling the Greek Crisis

The report from the International Monetary Fund is remarkable in its candor: efforts to bail out Greece were fumbled as the IMF, the European Commission and the European Central Bank all tried to promote their own agendas with little regard for the lowly Greek citizen.

Happily the disclaimer appeared on the front page:

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College students preparing for what?

The Bureau of Labor Statistics (BLS) has done us another favor: it has blown the cover off the perception that a college degree is worth the money. Their listing of the top 30 occupations in job growth for the next 8 years shows that only five of them need a college degree!  They are

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Responding to an email about Social Security and Medicare

I received a respectful email from a reader who asked about Washington’s response to the fiscal cliff:

With all this talk of going off the cliff and how not to…

Why is it that instead of spending billions of dollars for bailouts and giving billions to other countries…wouldn’t it be [better] to start bailing out Medicare and Social Security first?…

We the working class contributed to [them]. Once they get [our] money back into [them] they can figure out how to adjust it for the future [and] not penalize everyone [by hiking] the age to collect?…

Thanks for reading this even if you don’t answer.

I wrote her back that I would respond here, and now I’m stuck! How do I tackle this in such a short space (I try to limit my comments to 300 or so words – more than that, I’ve found, and people will move on)?

I have a few thoughts. First, the bailouts went to the banks and financial institutions because they are more important to the elite than Social Security and Medicare. They dare not let their precious money center banks fail. That’s the primary goal of the Federal Reserve, to protect bankers from the consequences of their bad behavior.

Secondly, you’re right that Washington has borrowed your money from your Social Security account and spent it elsewhere. What’s left is a pile of IOUs that will have to be redeemed by the government in the future. In fact, since Social Security is already in deficit, the government is being forced to redeem some of them right now just to keep making payments to current Social Security beneficiaries. But, as Harry Reid says, there’s a huge pile of those IOUs still in the account so we won’t have to worry about running out of them for many years!

Thirdly, I think you’re asking about priorities and how one would spend the government’s revenues in a sane and sensible world? Given that we don’t have such a world, then we can only dream of what things would look like if we did.

For one brief shining moment, the world was reasonably sane and sensible, the time that would allow the miraculous creation of the Declaration of Independence, to wit:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the Pursuit of Happiness – that to secure these rights, governments are instituted among men…

From there the founders created the Constitution which attempted (and succeeded, for a while) to secure those rights by limiting severely the power of the national government to a few enumerated ones.

Here’s the bad news: none of those limited enumerated powers included Social Security or Medicare or bailouts or the Federal Reserve. These are all manifestations of ignoring the Constitution and its limitations by insiders who now use the national government to promote their own ends which, sadly, are vastly different from making sure that Social Security and Medicare is solvent.

I don’t know if this helps. I hope so. In order to restore sanity we must go back to binding down the government from mischief by rebuilding the chains of the Constitution. That’s where the effort begins.

I’m way over my limit. Thanks for writing.

The Trouble with Outright Monetary Transactions

Mario Draghi presents his credentials as candi...

Mario Draghi presents his credentials as candidate ECB president (Photo credit: European Parliament)

Mario Draghi, President of the European Central Bank (ECB), spoke before Germany’s Parliament on Wednesday, defending his decision to purchase government bonds from member states needing financial assistance but without unleashing inflation. Similar to the Federal Reserve’s continuing attempts to stimulate the economy through the purchase of government securities, called Quantitative Easing, or QE, Draghi’s Outright Monetary Transactions, or OMT, “will not lead to inflation,” he claimed in the closed-door session. He said:

In our assessment, the greater risk to price stability is currently falling prices in some euro-area countries. In this sense, OMTs are not in contradiction to our mandate; in fact, they are essential for ensuring we can continue to achieve it.

This is utter nonsense, wrote Mish Shedlock, in his blog Global Economic Analysis. Since Draghi’s “mandate” is similar to that of the Federal Reserve — that is, to maintain price stability along with low unemployment — it’s impossible to increase the supply of money by buying government bonds with credits created out of thin air without eventually unleashing price inflation at the consumer level in the economy. Shedlock wrote:

The problem with such nonsense is you cannot break the law while screaming you are upholding it. Draghi now sounds and acts like hypocr[itical] US presidents of both political parties.

Both President Bush and President Obama (as well as the treasury departments under each administration) have shown little concern for the law. Increasingly presidents are of the mind [that] “we have to destroy capitalism [in order] to save it” or as President Bush stated and Obama practices: “ I’ve abandoned free-market principles to save the free-market system.”

What the members of the German Parliament wanted to hear was that Draghi would not be

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Another Obama Lie: “Trickle Down” Caused the Great Recession

Jonah Goldberg

Jonah Goldberg (Photo credit: Gage Skidmore)

Jonah Goldberg does a pretty good job in neutralizing Obama’s claim that tax cuts and the free market caused the Great Recession. Obama refers to it incessantly:

“Now Gov. Romney believes that with even bigger tax cuts for the wealthy, and fewer regulations on Wall Street, all of us will prosper. In other words, he’d double down on the same trickle-down policies that led to the crisis in the first place.” — President Obama, in an ad released Sept. 27.

As Goldberg notes, Obama uses it because it “resonates” with the voters – the ignoranti, I call them – who have not clue what he’s talking about, except that someone in the Romney camp is to blame.

Goldberg tries to explain why it’s a lie:

[Glenn Kessler, the “fact checker” at the Washington Post]  found that the Obama campaign has virtually no citations to back up the claim. The supporting material for the ad quoted above cites a single column by the Post’s liberal blogger, Ezra Klein, who told Kessler: “I am absolutely not saying the Bush tax cuts led to the financial crisis. To my knowledge, there’s no evidence of that.”

So, surprise, surprise, the Obama campaign is telling a lie over and over again, because it “resonates,” not because

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Is a Greater Depression Imminent?

Wayne Allyn Root: Why we are on the brink of the greatest Depression of all time

I am a successful small businessman and a patriot who loves America and always sees its greatness. I am also an optimistic, positive thinker who always sees the glass half full.

But not this time.

English: Wayne Allyn Root

English: Wayne Allyn Root (Photo credit: Wikipedia)

It’s over. It’s done. We’re toast. No way back. Sorry.

I see these kinds of articles a lot in my profession and they do get tiresome. Sometimes they annoy me. Sometimes I think they’re designed to discourage those of us in the freedom fight to keep us from continuing the fight.

I’ve written favorably about Wayne Allyn Root before when he picked Romney over Obama in November. He presented a persuasive case for his prediction, and I wrote about it.

But this time I think he’s wrong. Let’s look (briefly) at his arguments that a “Greater Depression” is imminent. They should be familiar to you (my comments in italics):

  1. In 1929 America was not $16 trillion in debt, plus facing over $100 trillion in unfunded liabilities. Actually, it’s more like $220 trillion, but I won’t quibble here.
  2. 1929, most of our states were not bankrupt, insolvent and dependent on federal government handouts to survive. This is true.
  3. In 1929, Social Security, Medicare, and Medicaid didn’t exist. The federal government had no such obligations threatening to consume the entire federal budget within a few years. Also true.

What is his solution? Whoops, didn’t he just say “It’s over. It can’t be saved. We’re doomed?” Actually, this is what he said:

This time we are in such deep trouble, the only solution is a radical restructuring of the politicians, the economy, and the way we view personal responsibility versus government handouts. If those changes don’t come then we are facing a long decline and the eventual end of America.

So, even though it’s over, there is a solution:

The solution is actually simple: dramatically cut the size, scope and power of government; cut spending; cut entitlements; cut taxes; cut government rules and regulations that smother, damage and destroy businesses, prevent startups, and kill jobs; reform Social Security, Medicare and Medicaid; reform public employee pensions; stop the wars (we can no longer afford to police the world); end or reform the Fed; end bailouts and stimulus (ask Japan about the failures of repeated stimulus); end the Democratic obsession with green energy and high speed rail (ask Spain about the waste in those two programs); encourage oil and energy exploration; encourage job creation by small business and the private sector; term limit politicians; institute school choice; and back the dollar with a gold standard.

I’ve heard all this before. Most of us know what must be done. The task is huge, the list is long, it will take years, and, no, Mr. Root, it won’t be simple.

Gary North thinks the US will default on these promises, and I tend to agree. But that’s a positive: people will learn how to become self-reliant once again. It will be painful.

But it won’t be fatal.

John Stossel Coddles Paul Ryan

John Stossel: Who Is Paul Ryan?

I wanted to like Paul Ryan.

Before he was nationally known, Rep. Ryan visited me at ABC, and we went to lunch. He was terrific. He was a rare politician, one who actually cared about America’s coming debt crisis and the unfairness of entitlements. He even talked about F.A. Hayek‘s “The Road to Serfdom“! If only more politicians thought that way.

But then the housing bubble burst. Ryan voted for TARP. Then he voted for the auto bailout. Who is this guy? I thought he believed in markets!

John Stossel

John Stossel (Photo credit: Wikipedia)

It’s easy for me to throw grenades, especially because my voice is so small and my opinion often discounted. And Stossel is one of my favorite libertarians. In fact I often question why Fox allows him on the network at all, given their statist mindset.

But Stossel has done the libertarian movement a disservice here, I think. He expresses admiration for Paul Ryan as an economic conservative: “He [Ryan] even talked about F.A. Hayek’s ‘The Road to Serfdom’”!

But it didn’t take. I read it in the sixth grade, and it took. Especially the chapter “Why the Worst Get On Top.” And I am in distinguished company. Gerald O’Driscoll of the Cato Institute wrote this:

In perhaps the best chapter of The Road to Serfdom, Hayek details “Why the Worst Get on Top” in totalitarian societies. The chapter begins with a quotation from Lord Acton: “Power tends to corrupt, and absolute power corrupts absolutely.” Hayek then elaborates the Actonian insight.

From that chapter which has informed my outlook on government and politicians ever since I have nothing but contempt for those who try to “fix things,” and interfere with our lives as a result. Many of them are, in the words of Mr. Welch—the founder of the John Birch Society—just “useful idiots” in the employ of darker forces bent on establishing a totalitarian dictatorship. I put Paul Ryan into that camp.

And now, unfortunately, so do I put John Stossel.

Ryan voted for TARP and the auto company bailouts and now regrets it. Stossel thinks that’s OK: Ryan has changed his mind: “I wish he had voted against those bills, but the political class was in near panic, and Ryan is a politician.”

That’s little comfort to me. Paul Ryan is an enemy of freedom. And any enemy of freedom is an enemy of mine. To have Stossel coddle Ryan and say, well, he meant well, all is forgiven, is treacherous.

Color me disappointed.

Ron Paul Has the Final Say

WASHINGTON, DC - FEBRUARY 29:  Republican pres...

In his last public opportunity to quiz Federal Reserve Chairman Ben Bernanke, who appeared before the House Financial Services Committee on July 18, Texas Congressman and Republican presidential candidate Ron Paul took the time to put things into perspective:

For the past few years the Federal Reserve System has received criticism from all sides of the political spectrum, and rightly so, for its unprecedented intervention into the economy and its bailouts of large Wall Street banks and foreign central banks.

This has been Paul’s theme ever since he entered Congress following a special election in April 1976. In a position paper that his staff prepared in June of 1976, Paul attacked a pending bill in Congress to fund the International Monetary Fund following the breakdown of the Bretton Woods agreement when President Nixon took the dollar off the gold standard in 1971.

The staffer primarily responsible for that paper, Gary North, remembers starting work on Friday, June 11, 1976, and being given the task of preparing the paper in time for the Monday deadline. He worked all weekend on it, and when it was published, it made such an impression on Senator William Proxmire, then chairman of the Senate Banking Committee, that he invited Paul to testify before his committee. Says North: “At the time, I had never heard of a House member testifying to a Senate Committee. I have never heard of it since.”

But that testimony launched a three-decades-long campaign by that lone congressman to question the existing monetary system, especially the centerpiece of that system, the Federal Reserve.

In his July 18 testimony, Paul recalled his primary problem with the IMF—the same problem he has with the Fed—is that it is a central bank that was deliberately designed to

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Bailout of Spain Just a “Credit Line,” Says New Prime Minister

Mariano Rajoy

Following another last-minute late-weekend meeting of European Finance Ministers, Spain’s new Prime Minister Mariano Rajoy happily announced that not only was his country going to get more bailout funds than it needs, it’s coming without any strings attached. This is because, according to Rajoy, the new measures instituted since the victory of his People’s Party last November have been so effective in bringing common sense and prudent behavior back to the country’s financial markets. Those “radical” fiscal, labor-market, and financial-sector reforms that were instituted were the key, he said, adding,

If we hadn’t done this in these past five months, what was put forward [on Sunday] would have been a bailout of the Kingdom of Spain. Because we had been doing our homework for five months, what did happen…what was agreed, was the opening of a line of credit for our financial system.

There is no conditionality of any kind.

According to a report by the International Monetary Fund (IMF), Spain needed at least $50 billion to rescue and recapitalize its banks. But the Finance Ministers decided to up the ante significantly, to $125 billion, just to be safe. Said Olli Rehn, the European Union’s top economist, “This is a very clear signal to the markets, to the public, that the Eurozone is ready to take determined action.” He added, “We deliberately wanted to ensure there is some additional safety margin…. This is preemptive action.”

What Rajoy failed to mention is that there are most certainly strings attached, and when

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JPMorgan Chase’s $2 Billion Trading Loss Results in Calls for More Regulation

Jamie Dimon - Caricature

Last week’s revelation by JPMorgan Chase’s CEO Jamie Dimon that the bank’s trading desk has suffered a $2 billion loss was followed on Monday by the resignation of three key players involved in the trade that went bad. The Chief Investment Office (CIO), Ina Drew, along with two of her associates, announced their retirements from the bank.

It was just two months ago that questions about risky trades being undertaken at JPM were passed off by Dimon as a “tempest in a teapot,” but on Sunday, on NBC’s Meet the Press, Dimon admitted that he “was dead wrong” and added:

We made a terrible, egregious mistake. There’s almost no excuse for it. [We] hurt ourselves and our  credibility [and expect to] pay the price for that.

Dimon and JPM are used to paying the price for their past errors and misdeeds. In December 2002, the bank paid $80 million as part of a $1.4 billion settlement involving 10 banks that deceived investors with biased research.

In 2003, the bank paid more than $2 billion in fines and settlements to investors and the Securities and Exchange Commission (SEC) for their role in fraudulently financing Enron Corporation that collapsed in 2001.

In March 2005, the bank paid another $2 billion following its involvement in underwriting some $15 billion of WorldCom’s bonds.

There’s more: In November 2009, JPM agreed to a $722 million settlement with the SEC over their involvement in a “pay to play” scheme where Jefferson County, Alabama, was brought to the brink of bankruptcy through fraud and excessive fees to be charged on refinancing the county’s sewer bonds.

And more: In January 2011, JPM admitted that it deliberately overcharged some 6,000 active-duty military families for their mortgages and illegally foreclosed on 18 of those families. At the time Dimon apologized for the “error” and sent one of his associates, chief lending officer Dave Lowman, packing.

Dimon was deliberately opaque in discussing the trade that went sour, saying only that it came from trading in derivatives that were designed to

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Iceland Says “No” to Bank Bailouts, Enjoys Economic Growth

THE GRAND KREMLIN PALACE, MOSCOW. President Pu...

To look at the streets of Reykjavik, Iceland, an alien would be hard-pressed to see any aftereffects of the banking crisis that nearly bankrupted the country in 2008. The capitol of the 40,000-square-mile island just below the Arctic Circle between Greenland and the United Kingdom is the country’s largest city where nearly two-thirds of the island’s 320,000 inhabitants reside. Unemployment is down, economic growth is positive, and its streets are calm.

But it was the center of the financial crisis precipitated in 2008 when one of its three largest banks had a big loan payment coming due and couldn’t come up with enough krona to make it.

As Iceland’s President, Olafur Ragnar Grimsson, said in an interview with Business Insider International:

If a collapse in the financial sector can bring one of the most stable and secure democracies and political structures to [its] knees as happened [here] in Iceland, then what could it do in [other] countries?

When Iceland’s legislature decided to take over the country’s three largest banks—Glitner, Landsbanki, and Kaupthing—it was discovered that, despite all four credit rating agencies giving them A or better credit ratings, the banks owed an amount that approached six times Iceland’s gross domestic product (GDP). Grimsson, who has been President of this parliamentary republic since 1996, had a decision to make: pump government (taxpayer) funds into them to keep them afloat, or

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“Too Big to Fail” Banks Wouldn’t Survive the Free Market

Photo of Bank of America ATM Machine by Brian ...

Just two days separated a letter from Matt Taibbi of Rolling Stone magazine and a report from the president of the Dallas Federal Reserve, each remarkably calling for the end of “too big to fail” banks.

Taibbi wrote his letter to Occupy Wall Street (OWS) supporters on March 27, giving a short talk to them about the worst of the banks—the Bank of America—and then handing out copies of it to the demonstrators. In typically lurid prose, Taibbi said that Bank of America

has systematically defrauded almost everyone with whom it has a significant business relationship, cheating investors, insurers, homeowners, shareholders, depositors, and the state. It is a giant, raging hurricane of theft and fraud, spinning its way through America and leaving a massive trail of wiped-out retirees and foreclosed-upon families in its wake….

But Bank of America hasn’t gone out of business, for the simple reason that our government has decided to make it the poster child for the “Too Big To Fail” concept. Because it is considered a “systemically important institution” whose collapse would have a major, Lehman-Brothers-style impact on the economy, two consecutive presidential administrations have taken extraordinary measures to keep Bank of America in business, despite a staggering recent legacy of corruption schemes.

In addition, Taibbi wrote,

This bank is like the world’s worst teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt’s funeral.

He concluded that the only way to solve the Bank of America “too big to fail” problem is to let it be subject to free-market forces: “It would be a great sign of America’s return to healthier capitalism if we could

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Group of 20 Balks, Stalls and Dithers

Español: Foto de familia de líderes del G20 en...

The Group of 20 meeting in Mexico City over the weekend decided that the best course of action was inaction, putting off making any decisions on how to “rescue” the European Union from its financial and economic difficulties until next month at the earliest. The statement justifying kicking the can down the road for another month or so was breathtaking in its obfuscation: putting off any decisions, it said, “will provide an essential input in our ongoing consideration to mobilize resources…” This is how finance ministers and world economic experts explain that, after two days of meetings, the best thing to do was nothing at all.

There were great expectations before the meeting ended that something of substance would come out of it. The plan was not only to pave the way for the second bailout of Greece but for each of the G-20 members (including the U.S. and most of the other industrialized nations on the planet) to pony up additional taxpayer funds to the International Monetary Fund (IMF) which would then be used, at its discretion, to bail out over-indebted countries like Greece, Portugal, Spain, and others as they need them. Expectations were that commitments totaling $1 trillion would be made before the end of the meeting on Sunday.

Plans went awry when Germany’s Chancellor Angela Merkel, responding to pressure from more sensible voices, said Germany would be unable to participate in any further assistance. This reluctance no doubt stems from the fact that the German parliament, the Bundestag, still hasn’t

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Fed’s “Independence” Threatened by Bernanke?

English: A frame from a screencast from the US...

With the publishing of a “white paper” about the housing market, Fed Chairman Ben Bernanke has rankled some Republicans that suggestions made appear to have transgressed some line of propriety that separates monetary policy, fiscal policy, and the Fed’s “independence.”

The study, prepared by his staff and signed by the chairman, decried the inability of the housing market to get back on its feet despite continued efforts by both Congress and the Fed to restart it. Bernanke wrote:

The challenge for policymakers is to find ways to help reconcile the existing size and mix of the housing stock and the current environment for housing finance. Fundamentally, such measures involve adapting the existing housing stock to the prevailing tight mortgage lending conditions—for example, devising policies that could help facilitate the conversion of foreclosed properties to rental properties—or supporting a housing finance regime that is less restrictive than today’s, while steering clear of the lax standards that emerged during the last decade. Absent any policies to help bridge this gap, the adjustment process will take longer and incur more deadweight losses, pushing house prices lower and thereby prolonging the downward pressure on the wealth of current homeowners and the resultant drag on the economy at large.

This crossed the line, according to Senator Orrin Hatch (R-Utah), who wrote a scathing letter to the Fed chairman: “I worry that…your…housing white paper…treads too far into fiscal policy, and runs the risk of being perceived as advocacy for

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Geithner Ignores Subpoena to Testify in Lehman Bros. Case

Secretary of State Hillary Clinton and Treasur...

The creditors’ committee representing what’s left of Lehman Brothers asked bankruptcy Judge James Peck last week to force Timothy Geithner—currently Obama’s Treasury Secretary but President of the New York Fed at the time of the Lehman Brothers’ bankruptcy—to answer some questions. The original subpoena issued by the committee to Geithner to appear last August was ignored and so the committee appealed to Judge Peck.

The committee claims that Geithner played a pivotal role in Lehman’s collapse and may have “unique” knowledge about a last-minute transfer of some $8 billion out of Lehman to JPMorgan just before that collapse. Lehman is suing JPMorgan in an attempt to get that money back and Geithner’s testimony is crucial. Time is running out: The discovery period for the committee ends on March 16.

The committee claims that JPMorgan did a “last-second collateral grab” in order to save itself while inflicting fatal damage on Lehman at the same time. And Geithner was in on it. The week before the Lehman collapse Geithner made 35 phone calls to Lehman’s CEO Richard Fuld and another 10 calls to JPMorgan’s CEO Jamie Dimon, and at least some of those calls, said the committee, centered on those collateral demands. Therefore, the committee insists that Geithner should be required to reveal what those calls involved.

Geithner has remained silent; however, a spokesman for the Treasury Department, Anthony Coley, said he couldn’t understand what all the fuss is about: “Treasury and the Fed have provided

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Big Banks Oppose Volcker Rule, Urge Delay in Implementing It

President Barack Obamaa, flanked by Paul Volck...

The deadline for comments on the proposed Volcker Rule was Monday night and hundreds, if not thousands, of letters arrived at the last minute to rail against the rule, mostly from Wall Street. The Volcker Rule — which would prohibit banks from trading with their own money — was proposed last summer by former chairman of the Federal Reserve Paul Volcker, who said in a letter to President Obama that they shouldn’t be gambling with money guaranteed by the taxpayers. Big losses by government-backed banks that were trading in risky securities such as mortgage-backed assets precipitated the financial crisis in 2008 and set up the need for federal bailouts of those banks.

The idea behind the rule is simple: Prohibit banks from making “proprietary trades” that are unrelated to traditional banking practices such as making loans and clearing checks. Putting such rules down on paper however is proving to be daunting and giving the banks affected a chance to buy some time.

Volcker’s letter to President Obama was three pages long. The rule incorporated into the Dodd-Frank act was 10 pages long. By the time the four regulatory agencies empowered to oversee its implementation — the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, the Comptroller of the Currency, and the Securities and Exchange Commission (SEC) — got done with it, the Volcker Rule encompassed 298 pages.

The public comment period started when the FDIC signed onto the bill on October 11, and ended Monday, February 13 at midnight. The draft offered for comment contained 1,300 questions on 400 topics so that the agencies would be able to “discern” the right, proper, and appropriate course of action to take with the final draft. Implementation of the Volcker Rule is scheduled for July. This gave the banks a perfect opportunity to delay the whole process by complaining among other things that the bill is far too complicated for the banks to be able to comply by then.

As of Monday the SEC had already received over 14,000 letters, at least one of them 365 pages long. Some attempted to respond to all 1,300 questions with answers of their own while others posed new questions and offered significant revisions to the bill’s language.

But that was Monday. By midnight another 200 letters from the primary target of the bill—Wall Street banks and investment houses—were expected. Lawyers representing Goldman Sachs, Morgan Stanley, and Citigroup as well as the trade group itself, the Securities Industry and Financial Markets Association (SIFMA), spent the weekend holed up in hotels in downtown Manhattan cranking out long and detailed responses to the proposed bill.

The strategy is clear: Delay the matter until after the elections when the entire game could change, including the need to reintroduce the legislation for congressional and presidential review, probably with many new faces perhaps more favorable to tabling the matter altogether. Dennis Kelleher, president of Better Markets, a nonprofit pro-regulation group, said, “It’s part of their ongoing strategy—if you can’t kill the

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European Fiscal Pact: Closing the Ring

Graphic "When Greece falls" presente...

Monday’s meeting of the European Union in Brussels resulted in agreement of 25 of the 27 member states to inflict upon themselves and their hapless and increasingly powerless citizenry the tools of international fiscal dictatorship.

The purpose of the “fiscal pact” is to enforce “budgetary discipline” so that the present euro crisis can be contained and future such crises averted. In the short run that means granting the European Central Bank (ECB) additional power to expand its reserves so that bailouts to failing countries can continue, subject to enforcement rules. In the longer run, the pact puts in place the primary tool of coercion, the European Stability Mechanism, to be effective in July.

European Council President Herman Van Rompuy said that initially the ESM will be limited to just €500 billion ($650 billion) but that the ultimate number “will be reassessed down the line.”

Critics say that’s the entire purpose of the ESM: to set up the mechanism of control under the guise of providing bailout funds to members in need while installing ruling class elites (bankers with ties to Goldman Sachs) out of reach of the taxpayer class. Angela Merkel, German Chancellor and mouthpiece for the ESM, was clear: “It is an important step forward to a stability union. For those looking at the union and the euro from the outside, it is very important to show this commitment.”

She failed to mention that Great Britain and the Czech Republic have both

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.