Christmas in October

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The $700B bailout contains is now over $800B. Why? It contains BILLIONS of dollars in #pork-barrel spending. About $112B to be more exact.

Lawmakers from both sides of the aisle are out of control on this. This entire problem could have been handled by the FED and market forces. It did not have to be lubricated with 16% pork.

America will become a debtor nation at this rate.

Here are some predictions for you to tuck in your electronic back pocket.

  1. Credit market problems will require more than just an injection of funds to become fully functional again.
  2. The FED will have to change the capital reserve ratios to keep us afloat.
  3. $700B is not enough.
  4. Consumer credit debt is next; or at least soon.
  5. Any rally in the Dow will be short-lived.
  6. Fannie problems have not finished their impact on overseas markets.

Further reading:

Billions in earmarks in Senate’s bailout bill

Bottomless Bailout

Kick the Ant Hill

NOW They Tell Us

The Blame Game

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The Democrats have been denying that they are the primary cause of the Fannie and Freddie fiascos. Even Bill Clinton admits that there needed to be greater regulatory controls and key Dems consistently fought against them. Listen to Cal Thomas:

When Speaker Nancy Pelosi took to the floor of the House on Monday to blame Republicans for the financial turmoil and charge them with a laissez-fare attitude toward regulation, it seemed like a calculated effort to shift attention and accountability from what Democrats have done to create the current conditions. Fortunately, we have YouTube.

At a 2004 hearing of the Government Sponsored Enterprises Subcommittee, then-Chairman Rep. Richard Baker (R-La.) predicted the collapse of Fannie Mae if nothing was done. Baker called for more regulation, something Democrats claim Republicans never wanted. In an editorial Tuesday, The New York Times got it wrong when it accused Republicans of engaging in “free markets-above-all ideology.” That just isn’t true. President Bush was calling for more oversight of Fannie Mae and Freddie Mac in his first year as president, though he also praised efforts to expand minority home ownership at a time when bad credit risks were straining the system.

Read the rest of the article – WORLD Magazine

I am ready to Kill the Bailout

Right Voices is on target again with a collection of quotes from Dems – In Their Own Words

Pelosi Allows Dems To Vote No

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Why did 94 #Democrats vote against the bailout? Take a look at Bill Dyer’s analysis:

I thought it was bad enough that House Speaker Nancy #Pelosi had made a deliberate decision not to make today’s vote on the Democrat’s economic stabilization bill a “party loyalty” vote in which the House Democratic leadership made absolutely clear that it expected loyal Democrats to vote in favor of the bill. Ignoring all of the immense power to persuade that inheres in the position of Speaker of the House, Speaker Pelosi wouldn’t even offer (or threaten to withhold) so much as a choice Capitol parking spot to make up the 12-vote margin between victory and defeat of H.R. 3997, the Emergency Economic Stabilization Act of 2008.

Speaking on John Gibson’s radio show later in the day, however, Karl Rove ran through, by name and often by committee or subcommittee chairmanship, the many, many Democratic members of the House whom Speaker Pelosi and the House Democratic leadership expressly authorized to vote against the economic stabilization bill. Glenn Reynolds boils this down to a succinct sentence which is almost exactly right: Pelosi gave key Democrats a pass on the bailout vote. The only quibble I have is that she didn’t just give key Democrats a pass. She gave them all a blanket pass, and then some members particular and specific encouragement to take it. It is inconceivable that she didn’t know exactly what the result would be.

The Dems Play Games with Votes.

Right Voices has a great video of Karl Rove

Mark My Words is a new blog I have just discovered. Read this for sure.

The Pork Goes On

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If Congress is trying to find ways to fund a bailout, perhaps they should start with the Omnibus Spending Bill.

Senate leaders wringing their hands over where to find $700 billion for the Wall Street bailout might start with the fine print of the omnibus bill: The measure includes more than $6.6 billion in pork-barrel spending.

The 2,000-plus earmarks fill 752 pages attached to the 357-page spending bill. Sen. Ted Stevens, notorious for his huge earmark requests, scored the largest haul—some $238.5 million in earmarks.

In the U.S. House, Rep. John Murtha (D-Penn.) brought in the most earmarks—more than $111 million, including $24.5 million for the National Drug Intelligence Center, an organization critics say is rife with mismanagement.

Democrats rushed the spending bill to the floor on Wednesday, giving Republicans and outside watchdog groups only a few hours to review the measure before a House vote. Critics complained that the process lacked the transparency for earmarks that Democrats promised when winning the majority in the House. But with the nation riveted by the Wall Street crisis, the spending bill and its earmarks made few ripples before passing with bipartisan support.

Cut and Save.

Putting Lipstick on Wall Street

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Democrats Kill Bailout

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The bailout was killed by House Democrats. Yes, Democrats. Losing by a margin of 228-205, the measure only needed 12 members to change their minds.

95 Democrats voted against the bill.

Quit blaming John McCain for failure to keep your majority, in the majority.

Take a look at these articles –

Bill Dyer at Townhall – Elections have Consequences

Hugh Hewitt – Duplicity and Cynicism

Michelle – The Crap Sandwich

Hot Air – Bailout Bill Fails After Pelosi Speech

How did they decide on $700B?

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How did the Treasury Department arrive at a figure of $700 billion for the bailout? Surely it was based on careful analysis and a detailed methodology.

Nope. They guessed. They just pulled a number out of thin air. They made it up.

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

This just gives me a fuzzy feeling about politicians in Washington. Perhaps somebody should peel them like a kiwi.

Read the Forbes article – Bad News For The Bailout and take a look at the LA Times also.

Michele Malkin has a series on the subprime lending crisis you should look at.

The Real Culprits In This Meltdown

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I wrote a lengthy post on this top yesterday but Investor’s Business Daily has expanded and improved on my material.

Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it’s dysfunctional, Democrats during the Clinton years are a prime reason for it…

[I]t was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.

Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority home ownership. And in so doing, he helped create the market for the risky sub-prime loans that he and Democrats now decry as not only greedy but “predatory”…

Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.

While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.

Market failure? Hardly. Once again, this crisis has government’s fingerprints all over it.

Powerline quotes Barney Frank in 2003 as saying

‘These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.

Way to go Barney!

Investor’s Business Daily::The Real Culprits In This Meltdown.

The Democrats Did It

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After days of moaning and blaming, perhaps a few facts should be inserted into the discussion about the current financial melt-down.

Barack Obama blames John McCain and Republicans for the mess. Why? According to Obama, Conservatives have been advocating de-regulation and free market controls and this de-regulation produced the current fiasco. Sounds great to liberals. Must be true.

However, a tiny bit of knowledge regarding economics and the free market concept are helpful. De-regulation did not cause this problem. New regulations caused it; new regulations from the Democrats.
Rewind to the 1995 Clinton Administration. Bill Clinton believed that everyone has a right to own a home. Everyone should own a house whether they can afford it or not. It was in the Constitution; or at least it should be. Banks were hesitant to follow the President’s lead however. They knew that there were certain geographic and demographic areas that foreclosure was a near certainty.

Mr. Banker, do you think it is too risky to loan money to people with a history of non-payment? Are you worried about default and foreclosure on loans to unstable people with unstable incomes?  Enter Fannie and Freddie. They will cover the risk. When the loans fail (and they did by the thousands), someone else will take the loss. So, give them the loan.

To the average consumer this is great news. To the poorest in our country it is better news. It no longer takes a good work history and 10% cash down to buy a house. You just need a smile and a signature and you can finance 105%, buy the house of your dreams, and make payments when it is convenient. Trillions of federally insured dollars, that never should have been there in the first place, flowed into the credit markets.  Understandably, home builders loved this plan. So did the Finance industry. All markets were booming. Politicians, especially friends of Obama, cashed in on the deals.

But everyone ignored some core principles of the free market. They forgot that risk requires compensation. Financial activities with risk fail, sometimes frequently, and require a high rate of potential return to cover the losses. Bill Clinton and Fannie Mae tried to remove the risk. But they couldn’t. They could only shift it to someone else; Fannie and Freddie. They forgot (if they ever knew) how money is actually made and how goods and services are exchanged.

Which brings us to the big, bad, predatory bankers and their outrageous practice of loaning money to people that could never afford it. This is exactly the change Bill Clinton and the Democrats were pushing. The created and changed laws so that people that could not afford a house could buy a house. Barney Frank is STILL trying to make this happen. The mortgage lenders were fulfilling the wishes of the White House. To vilify them now is to distort history.

This is not how the free-market works. It is not de-regulation it is changing regulations to produce a desired outcome with political pressure. Just the opposite of what McCain has advocated and exactly what Obama has supported. In 2005 when Conservatives tried to deal with the mess before it got out of control, McCain supported action and Obama opposed it.

Politicians are now crying that we must provide a $700 billion dollar bail-out, which is not nearly enough by the way. And who will be paying this enormous tab? You and me. People that have worked hard, paid our bills, scrimped, saved and managed our money wisely are absorbing the risk and paying the bills.

And who created this fiasco?
The Democrats did it.

Obama Flip-Flop

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Give Matt Lauer at ‘Thumbs Up’ on this one. He catches Obama in a clear double-standard and Obama ducks for cover.

Lauer was talking about how Obama hit Sen. McCain for flip-flopping on the AIG bailout — saying he opposed it one day then announce he supported it the next day.

But, as Lauer pointed out, scarcely three minutes after McCain said he opposed the AIG bailout last week, “in an interview with Meredith Vieira, Joe Biden, your running mate was asked the exact same question, ‘should the federal government bailout AIG?’ And he said, ‘No, the federal government should not bailout AIG.'” (As we noted at the time.) “And I think that in that situation,” Obama said, “I think Joe should have waited as well.”

“But it’s the kind of thing that drives people crazy about politics,” Lauer said. “It sounds like you were trying to score some political points against John McCain using his words, when your own running mate had used very similar words.” (emphasis mine)

Thanks to Jake Trapper for finding this at Political Punch.