Wednesday, May 26, 2010

Barker's Newsbites: Wednesday, May 26, 2010


Walking on Sunshine...

(*WINK*)

Hey... it's a HAPPY song!
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17 comments:

William R. Barker said...

http://online.wsj.com/article/SB10001424052748704113504575264940533857802.html

The Congressional Budget Office projects that under the Obama budget unveiled in February, spending will increase to $3.6 trillion in 2010 and $5.7 trillion in 2020 from $3 trillion in 2008.

* WHILE OF COURSE NOTHING TO BRAG ABOUT, FEDERAL OUTLAYS FOR FISCAL YEAR 2006 - THE LAST YEAR REPUBLICANS CONTROLLED BOTH HOUSES OF CONGRESS PLUS THE WHITE HOUSE - AMOUNTED TO $2,567,617 TRILLION.

* SO... $2,567,617 TRILLION SPENDING UNDER REPUBLICANS... $3 TRILLION UNDER A REPUBLICAN PRESIDENT WITH A DEMOCRATIC CONGRESS... $3.6 TRILLION UNDER A DEMOCRATIC PRESIDENT WITH A DEMOCRATIC CONGRESS...

* THE NUMBERS ARE THE NUMBERS, FOLKS.

[President Obama's] plan for profligate government spending creates $20 trillion in marketable Treasury debt by 2020, nearly 2.5 times today's $8.4 trillion burden. It would amount to 90% of the nation's annual output. The International Monetary Fund (IMF) estimates for the U.S. debt are even higher - 107% of GDP by 2020, based on its less rosy assumptions about debt service as debt levels rise.

All the forecasts are at nosebleed levels by any economic standards, yet they don't count the debt on taxpayers from unfunded benefit programs and Washington's huge money-losing mortgage institutions, Fannie Mae and Freddie Mac. In effect, we're in a debt hole the size of the Grand Canyon yet current economic wisdom is to dig deeper with more "fiscal stimulus."

Transfer payments already exceed 18% of the nation's personal income, shifting trillions in income from more productive parts of the economy to less productive.

May 26, 2010 at 9:42 AM
William R. Barker said...

* TWO-PARTER... (Part 1 of 2)

http://online.wsj.com/article/SB10001424052748704026204575266903446455896.html?mod=WSJ_Opinion_AboveLEFTTop

Environmental disasters have a way of separating the politicians from the serious, and that's certainly true of the Gulf oil spill. It was left this week to Coast Guard Admiral Thad Allen, who is overseeing the federal response, to express an overdue truth: "The government doesn't have everything we need to solve this problem."

* BUT THEY'VE DONE THEIR BEST TO POLITICIZE THE DISASTER...

In the month since the drilling-rig explosion that led to a catastrophic failure in a BP well, the Obama Administration and Congress have wasted no opportunity to berate BP for not plugging the leak and cleaning up the damage. Interior Secretary Ken Salazar, who wouldn't know an oil drill from a dental drill, once again rolled out his charming "boot on the neck" of BP metaphor to deflect blame.

(As if BP wants the leak to continue so it can keep getting trashed by the likes of Mr. Salazar and sued by more trial lawyers.)

Congress is midway through some 20 planned show-trials, er, hearings, in which such chemical and drilling experts as Edward Markey of Massachusetts have rapped BP for its inadequate response.

* AGAIN... THE GOVERNMENT WAS MANDATED BY LAW TO HAVE BOOMS ON HAND FOR JUST SUCH AN EVENTUALITY; THING IS... THERE WERE NO BOOMS. (I FIND IT FASCINATING THAT THIS KEEPS BEING IGNORED...) ANYWAY...

As Admiral Allen put it succinctly, this disaster is an "unprecedented, anomalous event" for which there is no easy solution. And, as the Commandant made clear, the U.S. government has neither the technology nor the expertise to engineer a fix 5,000 feet below the Gulf surface. Deepwater drilling is the realm of private oil and engineering experts, who, Admiral Allen noted, were currently "exhausting every technical means possible to deal with that leak."

This oil spill is a reminder - unpleasant for a public raised on fabulous technological advancement, and for an Administration engaged in taking over U.S. health-care and Wall Street - that government is not the Wizard of Oz able to solve every problem. It is closer, this time as in most cases, to the Wizard of Id.

Unwilling to admit this reality to the American public, the White House has instead scrambled to appear to know more than it does, most recently unleashing EPA Administrator Lisa Jackson to order BP to cease using a "toxic" chemical dispersant that breaks down oil. The frantic Ms. Jackson was quickly obliged to acknowledge that she didn't really know what the toxicity of the dispersant was and had no better ideas, and so she backed down.

(*SMIRK*)

This Obama finger-pointing has, if anything, backfired politically. The oil spill was an opportunity for Mr. Obama - who campaigned as someone who likes to wrap his mind around "complex" problems - to remind the country that energy exploration and engineering are not error-free disciplines. The U.S. oil industry has a remarkable safety record, even as it has moved into deeper and deeper water to provide the U.S. with affordable oil. But no industry is accident free, and Mr. Obama could have served the public better by explaining the technical challenges of fixing this deep water leak. His decision to pound on BP for not performing immediate miracles has instead fed the public's expectations that this is like plugging a hole in a swimming pool.

* To be continued...

May 26, 2010 at 10:08 AM
William R. Barker said...

* CONTINUING... (Part 2 of 2)

Republicans have also done the nation no favors in their political rush to turn this oil spill into Mr. Obama's "Katrina." In an attempt to tie the disaster to the Administration, they've targeted the Minerals Management Service, suggesting agency bureaucrats weren't tough enough on Big Oil.

Never mind that there is zero evidence so far that this blowout resulted from lax regulation or shoddy practices. Never mind, too, that the GOP is targeting one of the few federal agencies that happens to believe in more domestic energy production.

Sarah Palin also didn't help the cause of public understanding by attacking Mr. Obama as too close to BP because he received campaign contributions from the company. Does she think such frivolous partisanship will further the cause of domestic oil production?

* THE WSJ IS RIGHT. WHILE IT IS OF COURSE USEFUL FOR THE AMERICAN PEOPLE TO KNOW THAT BP AND ITS EMPLOYEES HAVE GIVEN MORE THAN $3.5 MILLION TO FEDERAL CANDIDATES OVER THE PAST 20 YEARS, WITH THE LARGEST CHUNK OF THAT MONEY GOING TO PRESIDENT OBAMA, I DON'T FEEL IT FAIR OF GOV. PALIN TO SUGGEST THAT OBAMA WOULDN'T BITE THE HAND THAT FEEDS HIM WHEN HE FEELS THE NEED - AS HE DEFINITELY DOES NOW.

* SERIOUSLY... MY SENSE IS THAT WHILE OBAMA IS AS PERSONALLY CORRUPT AS YOUR AVERAGE POLITICIAN, HIS ACTIONS ARE MAINLY DETERMINED BY IDEOLOGY RATHER THAN CONTINGENT FIRST AND FOREMOST ON PERSONAL MONETARY GAIN.

[N]o one has a greater incentive than BP to stop the leak. Washington continues to fuss over raising the $75 million federal liability cap for economic damages (empty hotel rooms, lost seafood industry wages), but BP is already on the hook for all the costs of containing and cleaning up the spill. BP estimates the tab has already hit $760 million, nearly double its estimate of two weeks ago.

We suppose it is too much to expect today's political class to withhold its game of panic and blame until industry plugs the leak and we learn what really happened and why. But the American people, watching this spectacle while the disaster unfolds, are being given one more reason to doubt the capacities and candor of its political leaders.

May 26, 2010 at 10:08 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704852004575258731188382288.html?mod=WSJ_Opinion_LEFTSecondBucket

The financial crisis has exploded plenty of long-held beliefs, including the idea that mortgage debt is a risk-free investment. But nothing has shaken the articles of faith that underpin another massive debt market: municipal bonds.

(*FROWN*) (*PURSED LIPS*)

These are dangerous assumptions. Just as with mortgages, the very fact that investors place unlimited faith in a market could eventually destroy that market. If investors believe that they take no risk, they will lend states and cities far too much—so much that these borrowers won't be able to repay their obligations while maintaining a reasonable level of public services. The investors, then, could help bankrupt state and local governments - and take massive losses in the process.

In the past two tumultuous years, tax revenues have plummeted by double-digit percentages, and state and local governments have struggled to close historic deficits. Nationwide, they face cash operating gaps of $200 billion, or 15% of their budgets, through 2011.

* YET...

Big spenders have shown no sign of cutting costs in line with a new reality. Ordinarily, if a borrower is in such straits, lenders start thinking twice about lending it yet more money: Who's to say that the borrower won't declare bankruptcy and default on its obligations?

[T]he industry's gatekeepers still consider municipal bonds low-risk. "We do not expect that states will default on general-obligation debt, even under the most stressed economic conditions," analysts at Moody's, one of the three major credit ratings agencies, wrote in a February 2010 report. As for cities and towns, "we expect very few defaults in this sector given the tools that local governments have at their disposal." The firm's chief competitor, Standard and Poor's, agrees.

(*SNORT*)

Before 2006, conventional wisdom held that if you wanted a risk-free investment, you couldn't do better than buy mortgage-backed securities. ... Yet in the end, investors pumped so much money into that supposedly airtight market that they blew it apart. In being so free with their money, investors in mortgage-backed securities and other mortgage debt ignored the obvious: homeowners would never be able to repay everything they were borrowing. [All the legal] protections that lenders enjoyed didn't matter a bit if borrowers couldn't and wouldn't repay what they owed.

Like homeowners, state and local governments spent the boom years using illusory gains to justify ever-higher spending and borrowing.

* ANYWAY... (*SIGH*)... THIS IS A LONG ARTICLE. IF YOU'RE INTERESTED, READ IT IN IT'S ENTIRETY.

* BOTTOM LINE... THE POLITICIANS ARE SETTING US UP FOR ANOTHER MAJOR FALL - WITH INVESTORS (NOT JUST BILLIONAIRES - I'M TALKING FOLKS COLLECTING PENSIONS AND LIVING OFF THEIR SOCIAL SECURITY AND INVESTMENT INCOME) AND TAXPAYERS ARE BEING SET UP TO TAKE ANOTHER FALL.

May 26, 2010 at 10:29 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704792104575264731572977378.html?mod=WSJ_hps_MIDDLESecondNews

Three big banks - Bank of America Corp., Deutsche Bank AG and Citigroup Inc. - are among the most active at temporarily shedding debt just before reporting their finances to the public, a Wall Street Journal analysis shows.

* MEANING SMOKE AND MIRRORS ACCOUNTING. (LIKE THE FEDERAL GOVERNMENT USES INTERNALLY!) (*SMIRK*)

The practice, known as end-of-quarter "window dressing" on Wall Street, suggests that the banks are carrying more risk most of the time than their investors or customers can easily see. This activity has accelerated since 2008, when the financial crisis brought actions like these under greater scrutiny, according to the analysis.

* ACCELERATED SINCE DEMOCRATS TOOK OVER BOTH HOUSES OF CONGRESS IN THE NOVEMBER 2006 ELECTION AND PRESIDENT OBAMA BEGAN HIS RESIDENCE IN THE WHITE HOUSE YOU MEAN...??? (*SMIRK*)

The Journal reported last month that 18 large banks, as a group, had routinely reduced their short-term borrowings in this way. ... Over the past 10 quarters, the three banks have lowered their net borrowings in the "repurchase," or repo, market by an average of 41% at the ends of the quarters, compared with their average net repo borrowings for the entire quarter, according to an analysis of Federal Reserve data. Once a new quarter begins, they boost those levels.

The data suggest "conscious balance-sheet management," said Robert Willens, an accounting specialist who heads Robert Willens LLC. If there are big gaps between average quarterly and quarter-end data, he said, the quarter-end numbers "are at best meaningless and at worst misleading and disingenuous."

* HMM... WHERE'S GEITHNER BEEN ON THIS...??? BERNANKE...??? WHY HASN'T CHRIS DODD BEATEN THE WSJ TO THE PUNCH HERE...??? (*SMIRK*)

Repos let financial firms borrow cash short term by putting up securities as collateral, enabling them to make bigger trading bets with borrowed money. Investing borrowed money magnifies profits in good times, but aggravates losses in bad times.

* PEOPLE...! SERIOUSLY...! IF THIS DOESN'T SOUND LIKE A CONSPIRACY TO "FOOL THE PUBLIC" BETWEEN WALL STREET AND WASHINGTON - PRESENTLY CONTROLLED BY BARAK OBAMA, NANCY PELOSI, AND HARRY REID - THEN WHAT'S IT SOUND LIKE...?!?!

A Citigroup spokesman declined to comment, as did a Federal Reserve spokeswoman.

* FOLKS... BEN BERNANKE... (*SIGH*)

Intentionally masking debt to deceive investors violates Securities and Exchange Commission guidelines.

* YOU'D THINK IN A SANE WORLD IT WOULD VIOLATE THE LAW!

Before sliding into bankruptcy in 2008, Lehman Brothers Holdings Inc. reduced its reported quarter-end borrowing by classifying repo loans as sales, a bankruptcy examiner found - creating what the examiner said was a "materially misleading" picture of Lehman's financial condition.

* FOLKS... SERIOUSLY... DO ANY OF YOU BELIEVE THAT PRESIDENT OBAMA AND NANCY PELOSI AND HARRY REID DON'T KNOW ALL ABOUT THIS...??? DO YOU THINK IT'S JUST A COINCIDENCE THAT KEEPING THEIR MOUTHS SHUT ABOUT SUCH SHENANIGANS PLAYS IN TO THEIR PARTISAN SPIN THAT THE ECONOMY IS "RECOVERING...???"

May 26, 2010 at 11:25 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704026204575265701607603066.html?mod=WSJ_hps_LEFTTopStories

Oil giant BP PLC told congressional investigators that a decision to continue work on an oil well in the Gulf of Mexico after a test warned that something was wrong may have been a "fundamental mistake," according to a memo released by two lawmakers Tuesday.

The document describes a wide array of mistakes in the fateful final hours aboard the Deepwater Horizon - but the main revelation is that BP now says there was a clear warning sign of a "very large abnormality" in the well, but work proceeded anyway.

The rig exploded about two hours later.

* WHOEVER MADE THE CALL SHOULD BE BROUGHT UP ON CRIMINAL CHARGES.

Although the memo identifies some of the problems that led to these mistakes, it doesn't identify who made the key decisions.

* AND THAT IS UNACCEPTABLE! AGAIN... WE NEED TO KNOW WHO MADE THE CALL AND IF THERE IS REASONABLE SUSPICION OF CRIMINAL NEGLIGENCE UPON FURTHER REVIEW BY COMPETENT AUTHORITIES THEN THE INDIVIDUAL (OR INDIVIDUALS) SHOULD BE CHARGED AND TRIED. PERIOD!

The memo sheds new light on a key test performed hours before the explosion that has been a focus of congressional investigations. BP previously told investigators that a "negative pressure" test, which checks for leaks in the well, was inconclusive at best and "not satisfactory" at worst.

But in the meeting Tuesday, BP went further, saying the results were an "indicator of a very large abnormality" but that workers - unnamed in the memo - decided by 7:55 p.m. that the test was successful after all.

That may have been a "fundamental mistake," BP's investigator said in the meeting, according to the memo. Reps. Henry Waxman (D., Calif.) and Bart Stupak (D., Mich.) wrote the memo, which was made public Tuesday.

* OK. I MUST ADMIT... I'M A BIT CONFUSED. BY "MEMO" ARE WE TALKING A BP INTERNAL MEMO - EVIDENCE - OR ARE WE TALKING "MEMO" IN THE SENSE OF THIS IS HOW POLITICIANS WAXMAN AND STUPAK RECOUNT THE "TESTIMONY...???" (IS THERE A TRANSCRIPT AVAILABLE OF THE ACTUAL QUESTIONING/ANSWERING IN CONTEXT...???)

May 26, 2010 at 11:25 AM
William R. Barker said...

* TWO-PARTER... (Part 1 of 2)

http://blog.heritage.org/2010/05/26/morning-bell-a-crisis-of-competence-in-the-gulf/

“Let’s be clear: Every day that this oil sits is one more day that more of our marsh dies,” Gov. Bobby Jindal (LA) said Monday. “We’ve been frustrated with the disjointed effort to date that has too often meant too little, too late for the oil hitting our coast,” he continued.

Specifically, Jindal is frustrated by the failure of the federal government to produce the 8 million feet of oil-blocking booms it asked for back on May 2nd and 3rd. So far Louisiana has only received 815,000 feet of boom, and even then the federal government has failed to place it in the correct locations.

* THE AGE OF OBAMA, MY FRIENDS...

Worse, Obama administration regulators continue to deny Louisiana officials permission to build up barrier islands between the coast’s marshes and the gulf. Federal regulators have so far refused to permit the state to act, fearing the unintended long-term damage to local wildlife. So instead of action, the oil continues to float on shore threatening the livelihoods of millions of Louisianans.

* AGAIN... THE AGE OF OBAMA...

Meanwhile the Environmental Protection Agency again demonstrated its uselessness when it informed BP it had 24 hours to find a less toxic alternative to the chemical it had been using to break up the oil. BP informed the EPA that no alternatives were available in sufficient quantity to deal with the spill, and when the EPA’s deadline came and went with no change in BP’s practices, the EPA meekly said they would study the issue, which was an acknowledgment that it has no answer either.

* SHOULDN'T THE EPA KNOW WHICH IS THE MOST EFFECTIVE CHEMICAL OIL DISPERSAL AGENT LEGALLY AVAILABLE FOR USE...???

The federal government’s failure to know how to handle the Deepwater Horizon oil spill does not end with the EPA. It goes all the way to the top. Frustrated by his government’s inability to master the problem, President Barack Obama reportedly cut aides short recently, ordering them to “plug the damn hole.”

As if no one had thought of that already.

(*SMIRK*)

But instead of focusing on the problem at hand, President Obama moved to appoint an unaccountable commission to study the problem substituting process for action at a time when leadership was needed.

* BTW... REMIND ME... HAVEN'T NANCY PELOSI AND HARRY REID BEEN RUNNING CONGRESS - THE BRANCH RESPONSIBLE FOR OVERSIGHT AND BUDGETING FOR EMERGENCY PREPAREDNESS - SINCE... OH... JANUARY OF 2007...???

* To be continued...

May 26, 2010 at 2:59 PM
William R. Barker said...

* CONTINUING... (Part 2 of 2)

BP, rather than taxpayers, should be held responsible for the costs of the clean-up and liability, and under current federal law that is the case.

BP is currently responsible for every penny it costs to clean the mess up. Furthermore, they are responsible for up to $75 million in liability costs (i.e. the secondary costs incurred by businesses and communities) directly, and up to $1 billion additionally comes from the Oil Spill Liability Trust Fund.

[AND...] the $75 million cap is waived if the responsible party is found to be grossly negligent. Calls to increase these caps retroactively are not needed and are more political expediency then either stopping the leak or mitigating its consequences.

* I DID NOT KNOW THIS! THE WAY THE MSM HAS BEEN SPINNING THE STORY, I HAD THE IDEA THAT $75 MILLION WAS A HARD AND FAST LIABILITY NUMBER! EITHER THE OBAMA ADMINISTRATION WAS HAPPY TO ALLOW THE MEDIA AND THUS CITIZENS TO MISUNDERSTAND THE SITUATION, OR... THEY THEMSELVES DIDN'T KNOW! (*SMIRK*) GREAT... JUST GREAT!

Equally frustrating are calls to raise the gas tax, and transfer the costs of this spill onto American consumers.

* EXACTLY! THIS IS JUST AN EXCUSE TO RAISE OIL PRICES; OBVIOUSLY ANY TAX INCREASES WILL BE PASSED ON TO CONSUMERS!

The Obama administration is set to announce new and stricter regulations on the oil industry tomorrow. But as the NEPA waivers and MMS failures of this accident show, the existing regulatory framework is already not being enforced. So how will new regulations piled on top of the old ones fix the problem?

The Obama administration’s leftist narrative is that after eight years of deregulation under the Bush administration, American businesses are dangerously under regulated. But this simply is not true. By every objective measure, regulation increased - not decreased - during the Bush years.

* AS JAMES CARVILLE MIGHT QUIP - "IT'S THE ENFORCEMENT, STUPID!" (OR IN THE CASE OF THE OBAMA ADMINISTRATION, THE LACK THEREOF.)

Instead of retroactively raising the cap on BP’s economic liability, thus undermining the rule of law, Congress should look to raising or eliminating the cap in the future.

* THIS ADMINISTRATION CARES LITTLE FOR THE RULE OF LAW. WE DEMONSTRATE THIS - PROVIDING EXAMPLES - QUITE OFTEN.

But most importantly, President Obama needs to accept the responsibility that the federal government is the ultimate owner of the land BP is drilling on, and as the primary responsible party he must show more leadership in solving this crisis.

May 26, 2010 at 2:59 PM
William R. Barker said...

http://kron4.com/News/ArticleView/tabid/298/smid/1126/ArticleID/6094/reftab/536/t/Presidential%20Visit%20Means%20No%20Pay%20for%20Some%20Solyndra%20Workers/Default.aspx

Construction workers at the Solyndra Plant in Fremont [CA] will be spending the day at home Wednesday without pay as President Obama visits the company to praise its work on solar panels.

* HMM... REVERSE STIMULUS...?

Union workers have been told not to come back until Thursday because of security concerns associated with the President's visit. Workers tell KRON 4's Kate Thompson this day off means they won't get paid.

May 26, 2010 at 3:42 PM
William R. Barker said...

http://www.nbcbayarea.com/around-town/food-drink/What-to-Eat-on-a-17600-Date-With-the-President-94935344.html

Mr. Obama's 19-hour whirlwind Bay Area fundraising trip filled Sen. Barbara Boxer's wallet with $1.75 million...

* HMM... PERHAPS BOX WILL PERSONALLY REIMBURSE ALL THOSE SOLYNDRA WORKERS WHO GOT DOCKED A DAY'S PAY...

(*SMIRK*)

* NAH... I'M NOT HOLDING MY BREATH EITHER...

May 26, 2010 at 3:42 PM
William R. Barker said...

http://www.thisislondon.co.uk/standard/article-23838369-tony-blair-to-earn-millions-as-climate-change-adviser.do

Tony Blair is set to earn millions of pounds advising an American businessman on how to make money from tackling climate change.

The former prime minister will be paid at least £700,000 a year to act as a “strategic adviser” to Khosla Ventures, a venture capitalist firm founded by Indian billionaire Vinod Khosla.

The Californian company bankrolls businesses hoping to profit from technology that helps reduce global warming and carbon emissions.

Mr Blair secured the job thanks to his “influence” and high level international contacts, whom he will be expected to lean on to open doors.

He has told friends he needs £5 million a year to fund his lifestyle.

* THESE PEOPLE ARE ALL FRIGG'N SCUM. ALL OF THIS BEHAVIOR IS UNETHICAL.

* FOLKS... THIS IS A PERFECT EXAMPLE OF HOW OBAMA'S "INTERNATIONALIST" APPROACH ENRICHES THE OLIGARCHS.

May 26, 2010 at 3:43 PM
William R. Barker said...

http://www.nypost.com/p/news/business/two_more_census_workers_blow_the_OqY80N3DBTvL17VmxKKR0O

You know the old saying: "Everyone loves a charade." Well, it seems that the Census Bureau may be playing games.

Last week, one of the millions of workers hired by Census 2010 to parade around the country counting Americans blew the whistle on some statistical tricks.

The worker, Naomi Cohn, told The Post that she was hired and fired a number of times by Census. Each time she was hired back, it seems, Census was able to report the creation of a new job to the Labor Department.

Each month Census gives Labor a figure on the number of workers it has hired. That figure goes into the closely followed monthly employment report Labor provides. For the past two months the hiring by Census has made up a good portion of the new jobs.

Labor doesn't check the Census hiring figure or whether the jobs are actually new or recycled. It considers a new job to have been created if someone is hired to work at least one hour a month.

(*SMIRK*)

* ENLIGHTENING OP-ED. WORTH READING IN ITS ENTIRETY.

May 26, 2010 at 3:44 PM
William R. Barker said...

TWO-PARTER... (Part 1 of 2)

http://www.forbes.com/2010/05/24/financial-reform-economy-tarp-opinions-columnists-william-m-isaac.html?boxes=opinionschannellatest

* I KNOW YOU PEOPLE ARE SICK OF HEARING ABOUT THE DODD BILL, BUT... WHEN THE SHIT HITS THE FAN I DON'T WANT YOU TO BE ABLE TO SAY YOU WEREN'T WARNED.

Senate leaders and the Obama administration patted themselves on the back after cramming through financial reform legislation.

The U.S. suffered through three major financial crises during the past 40 years (1972-74, the 1980s and 2007-09). The regulatory system that brought us these crises is politicized and badly broken, as Sen. Dodd, D-Conn., recognized when he proposed last November to consolidate regulation into a new, independent Financial Institutions Regulatory Authority.

The Senate bill does not address the issue.

The Securities and Exchange Commission is one of the principal culprits in the financial panic of 2008. It conspired with the Financial Accounting Standards Board to implement mark to market accounting despite objections from the Federal Deposit Insurance Corporation, the Federal Reserve and the Treasury, which said it was wrongheaded and would lead to severe credit contractions. Moreover, the SEC impeded creation of adequate loan loss reserves by banks during the boom years, allowed Wall Street firms to reduce significantly their capital cushions and eliminated regulations on abusive practices by short-sellers.

The Senate bill is silent on reforms at the SEC and does not mention the critical need to subject FASB's accounting pronouncements to systemic risk review.

The Senate bill makes a mockery of the Systemic Risk Council, which nearly every objective observer believes is an essential reform to monitor developing systemic risks. Instead of creating an independent Systemic Risk Council, the Senate bill entrusts governance and staffing of the Council to the Treasury and the other agencies the Council is supposed to oversee.

The banking and S&L problems of the 1980s were far more serious and pervasive than anything we faced this time around. Interest rates hit 21.5%, a deep recession ensued with unemployment reaching 11%, the agricultural sector slid into depression, a bubble burst in the energy sector, the real estate industry collapsed, and third-world debt burdens nearly brought down the mega banks. Roughly 3,000 banks and thrifts failed, including many of the largest. Despite these desperate circumstances, public confidence held, panic was averted and our country entered a period of unprecedented prosperity.

The crisis of the 1980s was managed by an independent Fed and FDIC which made maintaining stability their top priority.

* AND DON'T FORGET... SLAYING INFLATION! THAT WAS THE MISSION OF THE FED. ON PAPER IT STILL IS!

* To be continued...

May 26, 2010 at 11:30 PM
William R. Barker said...

* CONTINUING... (Part 2 of 2)

The crisis of 2008 was handled by a highly politicized Treasury Department that careened from one failure to the next with no coherent strategy. The markets panicked because they could not determine who was going to fail next, how the failure would be handled or whether anyone was in charge. The highly inflammatory rhetoric used by government leaders to sell the ill-conceived TARP program was the last straw. The economy flat-lined in October 2008 and the Dow Jones average spiraled from 10,800 on Oct. 1 to 6,500 six months later.

* LET'S ALL SHOUT IT OUT TOGETHER: "GOD DAMN GEORGE W. BUSH TO HELL...!!!'

* NOW... LET'S ALL RECALL... OBAMA SUPPORTED TARP... OBAMA SUPPORTED BAILOUTS... EVERYTHING BAD GEORGE W. BUSH AND SOME REPUBLICANS WENT ALONG WITH, DEMOCRATS WERE SHOULDER TO SHOULDER WITH THEM ALL THE WAY!

The Senate bill not does not fix what caused the panic of 2008 and in fact compounds the problems.

The Fed's and FDIC's emergency powers are curtailed and virtually all crisis management authority is institutionalized in Treasury. This all but guarantees that the Fed and FDIC will not be able to contain the next crisis and we will be left with two very bad choices: a massive taxpayer bailout and/or nationalization of financial system.

* I DON'T WANT ANY OF THESE UNELECTED BODIES TO SPEND MONEY! I DON'T WANT ANY BAILOUTS! THESE INSTITUTIONS SHOULD NOT HAVE "EMERGENCY POWERS" IN THE FIRST PLACE!

The Senate bill is a political document intended to assuage a public rightfully angry about the taxpayer bailouts of car companies and Wall Street. Any politician of either party who voted for TARP and votes for the current reform legislation is not sufficiently serious about fixing our government or financial system.

May 26, 2010 at 11:31 PM
William R. Barker said...

http://www.foxnews.com/politics/2010/05/25/obama-deploy-national-guard-troops-mexico-border/

President Obama is planning to deploy up to 1,200 National Guard troops to the U.S.-Mexico border...

* HOWEVER...

Sen. Jon Kyl, R-Ariz., said he's heard that "the 1,200 border patrol troops are, in effect, desk jobs."

"They aren't boots on the ground at the border," he said, adding that "they were not intended to be deployed to the border."

* WE'LL SEE - RIGHT..? (*SHRUG*) BUT IF KYL'S INFO IS CORRECT... (*GRITTING MY TEETH*) MY ATTITUDE: I'M WILLING TO GIVE OBAMA THE BENEFIT OF THE DOUBT. I'M WILLING TO WAIT AND SEE. BUT... IF KYL'S RIGHT... (*SIGH*)

Arizona Gov. Jan Brewer said..."I am anxious to hear of the details that have not yet been disclosed of where, how, and for how long additional forces will be deployed."

An administration official confirmed to Fox News that Obama plans to deploy the National Guard troops as needed and request $500 million for "enhanced border protection and law enforcement."

* $500 MILLION...?!?! HOW'S HE FIGURE $500 MILLION...?!?! DON'T WE ALREADY HAVE A MILITARY BUDGET...??? EVEN IF WE HAVE TO CALL UP GUARD TROOPS THAT WOULDN'T NORMALLY BE CALLED UP, WE'RE TALKING THE SALARIES AND BENEFITS FOR 1,200 SOLDIERS, NOT 1,200 GOLDMAN SACHS TRADERS!

* FOLKS... SERIOUSLY... I KNOW THAT MOST SIMPLE PASS RIGHT ON BY THIS WHO $500 MILLION BIT... BUT YOU SHOULDN'T! OBAMA IS APPARENTLY CALLING FOR ANOTHER $500 IN DEFICIT SPENDING/FEDERAL DEBT INSTEAD OF FINDING THE MONEY NEEDED WITHIN THE EXISTING FEDERAL BUDGET. THIS IS RIDICULOUS! THIS IS INSANE!

Sen. John McCain, R-Ariz., proposed an amendment to send 6,000 National Guard troops to the border -- a move Republicans want to pay for with unspent stimulus money.

* YEAH! THERE'S STILL BILLIONS - TENS OF BILLIONS - OF UNSPENT "STIMULUS" MONEY WE'RE PAYING INTEREST ON! WHAT'S THIS CRAP FROM OBAMA ABOUT AN ADDITIONAL $500 MILLION BEING NECESSARY...?!?!

May 26, 2010 at 11:31 PM
William R. Barker said...

* TWO-PARTER... (Part 1 of 2)

http://www.heritage.org/Research/Reports/2010/05/Obamacare-Impact-on-Seniors

Under the Medicare Modernization Act of 2003, Congress deliberately created a gap in Medicare drug coverage (the so-called “donut hole”) in which seniors would be required to pay 100% of drug costs up to a specified amount.

Obamacare provides a $250 rebate for seniors who fall into the “donut hole” and requires drug companies to provide a 50% discount on brand name prescriptions filled in the hole.

* SO IN OTHER WORDS OBAMACARE PROVIDES ON THE ONE HAND AN ADDITIONAL MIDDLE CLASS AND EVEN UPPER CLASS ENTITLEMENT - MORE DEFICIT SPENDING, MORE DEBT; WHILE ON THE OTHER HAND THE GOVERNMENT REQUIRES BUSINESS TO SIMPLY "GIVE AWAY" PART OF THEIR PROFITS - SUBSIDIZING GOVERNMENT POLICY. (SOUNDS LIKE A CLEAR VIOLATION OF THE "TAKINGS CLAUSE" TO ME!)

In 2011, Obamacare will also impose a new tax (a “fee”) on the sale of these brand name drugs in Medicare and other government health programs...

* OK... SO THE IDEA IS TO LOWER PRICES BY INCREASING PRICES...??? I MEAN THE TAX IS EXTRA OUT OF POCKET SPENDING BY CONSUMERS... RIGHT...???

Meanwhile, the law will freeze payments to Medicare Advantage plans and restrict physicians from referring seniors in Medicare to specialty hospitals where physicians have an ownership interest.

* I'M ON THE FENCE ABOUT THE REFERRAL ISSUE.

In 2013, the law eliminates the tax deductibility of the generous federal subsidy for employers who provide drug coverage for retirees. This could further undercut provision of employment-based prescription drug coverage for seniors.

* NOW IN A SENSE THIS SOUNDS LIKE JUST WHAT I FAVOR - NAMELY, REMOVING TAXPAYER SUBSIDIES FROM PRIVATE INSTITUTIONAL PLANS. THE PROBLEM IS... THE GOVERNMENT WILL STILL CONTINUE TO SUBSIDIZE THE DRUG COVERAGE DIRECTLY - AND AT A CUMULATIVE HIGHER COST TO TAXPAYERS!

* To be continued...

May 27, 2010 at 12:04 AM
William R. Barker said...

* CONTINUING... (Part 2 of 2)

With the freezing of Medicare Advantage payments in 2011, Congress has set the stage for a progressive reduction in seniors’ access to, and choice of, the popular Medicare Advantage health plans. ... Enrollment in Medicare Advantage by 2017 is estimated to be cut roughly in half, from a projected 14.8 million (under current law) to 7.4 million. Since there are serious gaps in Medicare coverage, including the absence of catastrophic protection, roughly nine out of 10 seniors on traditional Medicare already need to purchase supplemental insurance, such as Medigap. Without Medicare Advantage, millions more seniors will have to go through the cumbersome process of paying two separate premiums for two health plans.

Obamacare has not ameliorated the growing problem of projected physician shortages and has surely made it worse. Under the new law, physicians will be even more dependent on flawed government payment systems for their reimbursement. Moreover, the congressionally designed Medicare physician payment update formula, the Sustainable Growth Rate (SGR), initiates cuts that are so draconian that Congress goes through annual parliamentary gyrations to make sure its own handiwork does not go into effect.

* THAT'S THE "MEDICARE DOCTORS FIX" WE HEAR SO MUCH ABOUT; THE ONE OBAMA'S OBAMACARE COST ESTIMATES "ASSUMED" WOULDN'T TAKE PLACE EVEN THOUGH EVERYONE KNEW THEY WOULD.

The new law also dramatically expands Medicaid, a poorly performing welfare program with low physician reimbursement rates, and this expansion will account for roughly half of the 34 million newly insured Americans. Furthermore, the law creates an Independent Payment Advisory Board, which will recommend measures to reduce Medicare spending. Formally, the board is forbidden to make recommendations that ration care, increase revenues, or change Medicare beneficiaries’ benefits, cost-sharing, eligibility, or subsidies. For the board, reimbursement for doctors and other medical professionals seems the only target left. But payment cuts can effectively ration care.

* SOUNDS GREAT, HUH?! (*SNICKER*)

[C]reating a real problem for seniors, the CMS Actuary estimates that roughly 15% of Medicare Part A providers - the part of the Medicare program that pays hospital costs - would become unprofitable within 10 years.

* MEANING MORE RATIONING, MORE GOVERNMENT SPENDING, OR MOST LIKELY... A COMBO OF BOTH.

May 27, 2010 at 12:04 AM

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