Tag Archives: bailout

Greece – The Canary in the Coal Mine

By now, just about everyone is aware that Greece has issues. But what’s a bit appalling is how little we know about what is really happening with that country. The knowledge most people have boiled down to two points; Greece has run out of money and the people there are rioting in the streets. However if one digs a little deeper, you’ll realize that Greece is essentially no longer a sovereign country – it is a country led by a technocrat and more or less owned by the EU and ECB. Before I get into the implications of what that means, let’s first go through the brief history of how Greece got to where it is today.

Between 1999 and 2008, Greece’s real GDP was hovering between 3-4% while their debt percentage hovered in and around 100% until 2008 where it stood at 113% during the global recession. In 2009, the newly elected Prime Minister George Papandreou came into office and soon after revises the country’s budget projections, indicating the government had been understating its deficit for years. That year Greece’s debt percentage shot to 129% and is currently standing at 173% projected. After several credit downgrades in 2009 and 2010, Papandreou agrees to implement harsh austerity measures in exchange for $152 billion in loans from the European Union and the IMF. Riots ensue as the Greek population does not want to give up anything. Despite Greece meeting the austerity requirements of 2010, credit ratings continue to be downgraded so Greece pushes through another set of highly unpopular austerity measures June 2011 to qualify for a second bailout package for $157 billion in loans. Shortly after this, the Greek parliament agrees to new highly unpopular taxes, cutting public sector jobs, decreasing public sector wages, decreasing pensions for high-income workers and scaling back collective bargaining rights.

In addition to this very brief recent history, it is also important to note how Greece got to this point in the first place. Ironically, it began 30 years ago Papandreou’s father Andreas began building an unsustainable civil service in order to continue winning elections. Additionally, Greece had spent the last few decades erecting social safety nets producing cradle to grave benefits such as government healthcare, a generous welfare system and a retirement age of 61, (social security). In fact, the entitlement mentality is so firmly entrenched in Greek society, the population there does not understand anything else and seems perfectly willing to give up its’ national sovereignty while devolving into a cesspool of pain and misery grasping at the last reed it can find while drowning. And because they have no basis for understanding true freedom and liberty, they are willing to live through the degradation of their country in the hopes that things might magically get better. Here are a few of the things that are going on in Greece that are getting very little press in the US.

  • After the collapse of the socialist party in November 2011, an interim prime minister, Lucas Papademos was sworn in to lead Greece through the economic crisis. Papademos is a technocrat and was previously vice president of the European Central Bank. (Could you imagine Ben Bernanke being sworn in as interim President?)
  • Having lost its fiscal independence, Greece is now required have the permanent presence of a Eurogroup Task Force with strong onsite monitoring capabilities. (In other words, it’s their money and they have the right to manage their money. Who owns the bulk of the US debt?)
  • This EU presence will ensure that state revenues will flow into a segregated escrow account for state revenues.
  • The Greek constitution will be amended to ensure that priority will be given to serving debt payments. This includes the right for European banks to seize Greece’s gold reserves, 111.6 tons.
  • Public sector salary cuts are so deep and because they are retroactive to November 2011, up to 64,000 workers will have to work without salary for a month and some may even be asked to return money.

There is far more to the Grecian condition than what I can post in this blog but the point is obvious. Greece’s socialistic experiment has been a complete and utter failure and from a practical perspective, they are no longer a sovereign country. And despite all of this, Greece is virtually assured to default anyway, only now with zero gold reserves.

Socially, the Greeks are feeling completely hopeless and are turning bitter towards the EU and specifically Germany. There are riots and lootings in the streets. Well dressed Greeks have been reported rummaging through the garbage for food. Clinics that were set up to service the immigration population in Greece have seen a 22% jump in the domestic population. And still, they’re clinging on to an idea that didn’t work – hoping against hope that it will all just go away

Understanding what is happening in Greece is essential when looking at our current economic situation. From a GDP perspective, the US is in a worse economic condition than Greece but we have the ability to print money. However, eventually every country will have to pay back the debt that they owe and Greece gives us a better understanding of what can happen when we fail to make the tough choices today. We cannot afford our current social programs and Obamacare begins to hit its stride in full in 2013. That means higher taxes and still more debt. Despite what’s lacking in our current healthcare system, Obamacare literally means the destruction of economy.

We have an opportunity this year to elect real leaders that will face our issues head-on. We need to repeal the healthcare bill and we need to seriously manage the scaling back of all of our social programs – social security, Medicare, food stamps, etc. We either face up to our issues with honesty and determination, or we will wake up one day and realize our country isn’t even ours anymore.

Progressivism: Philosophy of Evil

“Put on the whole armor of God, that ye may be able to stand against the wiles of the devil. For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places”.
Ephesians 6:11, 12

When Ronald Reagan labeled the Soviet Union as the “Evil Empire”, the progressives went nuts. When George Bush called Iran, Iraq and North Korea “The Axis of Evil” they went nuts again. Progressivism, the Americanized version of European and Asian socialism, is made up mostly of hard-core socialists and secular humanists. Progressivism does not recognize the concept of evil. It believes in the perfectibility of human nature and the promise of utopia here on earth to be brought about by the enlightened, benevolent hand of government.

Masquerading as the savior of humanity, in reality all socialism, whether labeled socialism, Nazism, fascism, communism, or progressivism is the very essence of evil. During the twentieth century, socialism in its various forms was responsible for the slaughter of untold millions of innocent people through genocide, war, and political purges. In the Union of Soviet Socialistic Republics, 60 million were slaughtered; under the Nationalist Socialists German Workers Party, 20 million; and under the People’s Republic of China, 50 million. Add to that the millions who died under Pol Pot, Castro, Ho Chi Minh, and other socialists dictators, and you have an unbelievable amount of human suffering that can only be ascribed to evil.

For those unfortunate enough to live under one of the forms of socialism, life consists of misery, oppression and deprivation. Considering the consistent failure of socialism during its hundred and fifty year history, it is difficult to understand how any sane person could voluntarily choose it as the preferred systems of government and economics. There has never been an experiment in socialism of any duration that can be pointed to as an example of a successful culture. Every time it is tried, it fails miserably. To understand this incongruity of human experience we only have to look at the recent history of our own country.

Socialism is never presented as “socialism”. In fact, the most ardent supporters of socialist policies are offended when someone identifies them as socialists. In America, socialism is sold under the pseudonyms of “liberalism”, “progressivism” and occasionally “fiscal conservatism“. For that reason, most people who support socialist policies do so without knowing they are embracing socialism. The essence of socialism is deception. At first glance, it appears that socialist policies are motivated by the highest of human ideals, compassion, concern, caring, sympathy, etc. Socialists’ appeals are made on behalf of the poor, the children, the disenfranchised, and those who have been unfortunate in life’s lottery. The reality is that socialism appeals to the basest of human flaws: jealousy, hatred, greed and envy.

Progressives’ most potent weapon against capitalism is class envy and jealousy. Early on, they perfected the technique of demonizing “big business”. In the late eighteen hundreds progressives discovered that if they stereotyped “big businesses” as the enemy of the very people they served, the people, in return would grant progressives political power, not only over businesses but in other areas as well. Politicians found that by blaming the “robber barons of industry” for the ills of society— and there were many— they could win votes and support for their policies by posing as champions of the oppressed.

In the early stages of the progressive era, the targets were the railroads, oil companies, steel companies, tobacco companies, and others who were instrumental in raising the standard of living for the American People. Progressive demonization of “big business” reached a high point under President William McKinley in1898 with the formation of the “U.S. Industrial Commission on Trusts”. Theodore Roosevelt won the Presidency in 1900 on the basis of his attacks on “big business”, and “trust busting” became the theme for his time in office. However, William Howard Taft who succeeded Roosevelt as President was even more successful, breaking up 90 large firms during his four years in office compared with Roosevelt’s 44 during his eight-year term.

The vilification of “big business” proved so politically successful for the progressives in the beginning that they have continued to use the tactic ever since to gain public support for their policies. The “villain du jour” currently is the insurance industry. A year ago, it was the banks. It all depends on what progressive policy is being pushed at the time. By successfully blaming the banking industry for our current economic woes rather than destructive government economic policies, Congress was able to gain support for its “bailout” packages. It is now attempting the same thing with health care, blaming insurance company “greed” for its high cost in order to gain support for their “reform” proposals.

Unfortunately, it seems to be working. The entity most often blamed by the media, and ultimately the public, for the exorbitant cost of health care is insurance company greed. The fact is that insurance companies are in general no more profitable than other companies of similar size, and a large percentage of their profits come from investments, not premiums. The real greed comes not from capitalism but from progressivism. The number one attraction of progressivism is its promise to provide the public with economic benefits they have not earned by forcefully taking from the earnings of others. This attitude is the epitome of greed.

Deception, corruption, envy, greed, jealously, coercion, thievery and wholesale murder mark the existence of socialism in the world. Socialism in America is represented by the progressives in and out of government, primarily in the Democratic Party but extant in the Republican Party as well, only to a lesser degree. The true “Axis of Evil” in America, that threatens to destroy the most successful system of government in world history are the progressive politicians, public sector unions, and federal bureaucracies.

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Obama the Community Organizer is Back

minute-man-2-lithoObama has gone back on the campaign trail to sell his trillion dollar spending plan. Those who were asking during the presidential campaign, “What does a community organizer do” can find out by watching him in action as he attempts to sell the American people on the largest expansion of government in history.

Obama learned his skills on the streets of Chicago following the teachings of twentieth century organizer, Saul Alinsky. The two main elements of the Alinsky model are fear and anger. The hard sell part is fear. In community organizing, the organizer canvasses the community to find out what residents are most dissatisfied with in their lives. Next, the organizer gets members of the community together and reminds them of how miserable their lives really are, exaggerating or emphasizing as necessary.

After two years of the Democrats talking down the economy as the “worst economy since The Great Depression” identifying the dissatisfaction is fairly easy. Now as president, it is also easy to get people together in “Town Meetings”. In these meeting Obama continues to emphasize how bad the economy is, although the truth is that it is nowhere near as bad as “The Great Depression”,—I was there. It probably will be soon, however, if Obama succeeds in his efforts.

The next step is to create a common reason for the misery. It is important to convince those suffering that they are not culpable in any way for their problems. At this stage it is important to set up a common enemy or enemies the problems can be blamed on. Organizing in the community, the enemies are always the exploitative employers, greedy bankers and merchants, uncaring landlords, etc., etc. These “straw men” change only slightly on the national stage. Here they are “Wall Street”, the financial establishment, and the greedy mortgage lenders.

To heighten the feelings of despair in the audience the organizer attempts to sell them on the idea that things will only get worse if they continue to do nothing, thereby creating a need for urgency. The objective here is to turn the supposed “victimhood” of the listeners into anger at those victimizing them. If enough anger is aroused they will be motivated to action. In the community, protests and demonstrations are organized to pressure local politicians and businesses to acquiesce to the demands of the group.

Again, the process changes little at the national level. Now we have the President of the United States traveling the country recreating the forums in which he worked as a community organizer during his early career. The main theme today, as then, is unless immediate action is taken the situation is only going to get worse. Instead of explaining in detail exactly what actions are planned and the possible unintended consequences that may follow, the organizer simply paints a rosy picture of how great life will be if they will only trust in him.

This is the strategy that won Obama the White House and he is counting on it to convince the American People to scrap the Constitution, abandon free market capitalism and accept European style Marxist socialism as the economic and political structure of our government. The problem is that if he succeeds, and it looks as if he will, turning back the change will be an almost impossible task.

To accept the first two premises of the socialist/democrats that “we must do something” and “only the government has the means to help us”, is to deny the evidence of four hundred years of American history and almost two hundred years of world history. Capitalism is the only means found thus far that creates universal prosperity. Socialism, which is nothing more than a parasite in the body of capitalism, never works as promised, and eventually kills its host.

The government’s only legitimate role is to get out of the way and allow capitalism to work. It can do this by relaxing some of its counterproductive regulations and stop draining the economy of funds through excessive taxation and social mandates.

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The Trillion Dollar Pork Barrel

liberty-bellIf you have noticed a loud whirring sound lately, it is probably the sound of Thomas Jefferson, James Madison and the signers of the Constitution spinning in their graves as they watch the devastation of their beloved document by our socialist leaders in Washington.

On Saturday the White House released a four-page document outlining the President’s spending plan.  The report was a more detailed version of the plan announced in his speech January 9.  It calls for $825 billion in pork barrel spending under the guise of “America Recovery and Investment”, otherwise known as the “stimulus package”.

According to White House sources, the plan is near completion in the Democratic controlled Congress.  The proposed bill will contain more pork than all the meatpacking plants in America combined.  However, there is very little stimulus of the type that might create a substantial number of new jobs, or “jump-start” our lagging economy.  Instead, it seems designed to enhance the reelection of the Democratic Congress in the 2110 elections.

The Congressional Budget Office predicts that most of the spending will occur in 2010 and 2011, coincidently just in time for the 2010 and 2012 elections.  Among the goodies supposed to create jobs and stimulate the economy is $30 billion to promote renewable energy, $200 million for renovating the Capital Mall, $275 billion in tax relief, even for the 40+ percent who pay no taxes, $50 million for the Endowment for the Arts, and, oh yes, $360 million to buy condoms for preventing the spread of venereal disease.

President Obama indicated his estimation of the intelligence of the American voter by boasting that the bill would contain no “earmarks”.  With that much pork, who needs earmarks?  Many Republican lawmakers expressed opposition to the bill as it is emerging, but for the wrong reasons.  They are not opposed to the idea of “bailouts” per se; they seem more upset that some of their pet projects are not being funded.  The vote buying is directed mostly to the reelection of Democrats.

When this spending plan goes into effect, the social, economic and political structure of American will be changed forever.  As government takes more and more control of businesses through stock purchases and regulations the capitalist system that has given us a standard of living that is the envy of the world will gradually be transformed into a government planned socialist economy.  With the planned deficits running at the rate of over a trillion dollars per year for the foreseeable future, we can expect the onset of hyperinflation and taxation that is even more confiscatory.  If not for us, then for our children and grandchildren.

It is not, however, the bleak social and economic outlook that should bother the true patriot.  It is the total, complete and probably irrevocable loss of our Constitution that should concern us.  Socialism cannot exist within the framework of our Constitution.  The Constitution is based on the idea of free market capitalism with each individual free to pursue his or her own prosperity as they think best.  The changes required just to make the proposed plans for health care and energy use in any degree effective will require major “forced” changes in our personal choices of lifestyle and living habits.  An outline of the plan is posted on the White House website.

  • Doubling the production of alternative energy in the next three years.
  • Modernizing more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills.
  • Making the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized.
  • Equipping tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries.
  • Expanding broadband across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.
  • Investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.

The reader with a working knowledge of the Constitution will notice that none of the six items listed above fall within the authority of the enumerated powers delegated to Congress by the framers.  Pseudo-Constitutional scholars like President Obama and others will attempt to authenticate the constitutionality of the plan by pointing to the phrases, “general welfare” and “necessary and proper” found in the first and last clauses of Article One, Section Eight of the Constitution.

I have written many articles on these two clauses in the past.  This time I prefer to offer the opinion of two REAL Constitutional scholars, Thomas Jefferson and James Madison.  One of the arguments used by those opposed to the ratification of the Constitution in 1787 and 1788 was that these clauses granted too much power to the federal government and there was the danger that future Congresses would use them to infringe on our liberties.  In an article appearing in the Independent Journal a New York newspaper James Madison responded to this objection:

“It has been urged and echoed, that the power ‘to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,’ amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare.”

“No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction. Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it; though it would have been difficult to find a reason for so awkward a form of describing an authority to legislate in all possible cases.”

“A power to destroy the freedom of the press, the trial by jury, or even to regulate the course of descents, or the forms of conveyances, must be very singularly expressed by the terms “to raise money for the general welfare. ”But what color can the objection have, when a specification of the objects alluded to by these general terms immediately follows, and is not even separated by a longer pause than a semicolon?”

“If the different parts of the same instrument ought to be so expounded, as to give meaning to every part which will bear it, shall one part of the same sentence be excluded altogether from a share in the meaning; and shall the more doubtful and indefinite terms be retained in their full extent, and the clear and precise expressions be denied any signification whatsoever? For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power?”

“Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars. But the idea of an enumeration of particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity, which, as we are reduced to the dilemma of charging either on the authors of the objection or on the authors of the Constitution, we must take the liberty of supposing, had not its origin with the latter.”
~ Federalist No. 41 by James Madison

In 1791 Thomas Jefferson was engaged in an argument with Alexander Hamilton, the Secretary of the Treasury, concerning the establishment of a National Bank.  In a paper to President George Washington concerning the matter, Jefferson dealt with the so-called “elastic clause”.

“The second general phrase is, ‘to make all laws necessary and proper for carrying into execution the enumerated powers.’ But they can all be carried into execution without a bank. A bank, therefore, is not necessary, and consequently, not authorized by this phrase.

It has been much urged, that a bank will give great facility or convenience in the collection of taxes. Suppose this were true: yet the constitution allows only the means which are ‘necessary’ not those which are merely ‘convenient’ for effecting the enumerated powers. If such a latitude of construction be allowed to this phrase, as to give any non-enumerated power, it will go to every one; for there is no one which ingenuity may not torture into a convenience, in some way or other, to some one of so long a list of enumerated powers. It would swallow up all the delegated powers, and reduce the whole to one phrase, as before observed. Therefore it was, that the constitution restrained them to the necessary means, that is to say, to those means without which the grant of the power would be nugatory.”
~ Thomas Jefferson, January 15, 1791

The framers rightly believed that to protect the liberties of the people it was necessary to limit the powers of the federal government to those specifically granted to them by the Constitution.  To further reinforce this belief the ninth and tenth amendments were added to the Constitution in the Bill of Rights.  That premise was no truer then than it is today.

The doctrine of “enumerated powers” is still the best protector of liberty we have to defend ourselves against the spread of tyranny threatened by Obama’s plan to “save us”.

The Bush Legacy

minute-man-2-lithoIf President Bush had stayed at least partially faithful to his oath of office, historians may have listed him along with Reagan and Truman for his stand against Islamic terrorism.  Instead, he will be listed with Roosevelt and Johnson as the President who finally brought socialism to America.

On Thursday, Republicans in the Senate stopped the ill-advised bailout of the United Auto Workers union.  Unfortunately, their reasons were not because of its violation of free market capitalism or the Constitution.  Their reasons were more pragmatic than principled.  The Senators did not believe the proposed loan would be effective without major revisions in the industry’s cost structure, particularly its labor costs.

According to news reports, the President is considering doing an end-run around Congress and using a part of the $700 billion already appropriated for stabilizing the financial markets.  There is no doubt the automakers will get financial assistance of some kind from the federal government.  More than likely Bush will arrange for a “bridge” loan to tide them over until the Obama administration takes over in January.

With a heavily socialist Congress and a socialist administration, the U.S. auto industry will eventually be nationalized to one degree or another.  Instead of the industry being run by industrialists who understand the car business, it will be run by a Car Tsar from Washington.
Detroit automakers will be forced to build “green” cars acceptable to the socialist base of the Democratic Party.

The one factor that seems not to be taken into account by the would be wizards of Washington is the consumer factor.  There is no indication the motorized roller skates Washington will insist on being foisted on the consumer will be accepted by enough buyers to keep the UAW in the manner to which it has become accustomed.

Capitalism is not driven by the capitalists.  It is driven by the consumer.  There is going to be X number of cars purchased by consumers over the next few years.  The number of cars “X” represents will depend on the economy.  The number of cars sold in the U.S. each year is determined by the consumer, not the politicians in Washington or the carmakers in Detroit.  The Big Three automakers and the “transplants” will be competing for their share of that number.  Therein lays the rub.

The American consumer will buy the product that represents, in their mind, the best buy.  There is nothing Washington can do about that fact.  They can influence the kind of cars sold through regulations but they cannot dictate the number that will be purchased by the consumer.  The competition for the “fuel efficient” car market will be between manufacturers located in UAW dominated Michigan and foreign automakers with plants located in right-to-work states, mostly in the south.

In that competition, the Detroit companies do not stand a chance.  The difference in the cost of building a car in Detroit and building a car of equal value in Alabama or Tennessee is several thousand dollars each in favor of the latter.  Operating under Washington “oversight” the Big Three, if they survive, will continue to operate at a loss for the foreseeable future.  That leaves the government with four choices acceptable to the socialist base of the Democratic Party.

First is to have the taxpayer take over the “legacy cost” of the Detroit companies.  Second, is to subsidize consumer purchases of Detroit made cars through tax rebates or outright payments to the purchaser.  Third, is to keep pumping money into Detroit companies until the rest of the economy is wrecked.  Fourth, is to completely nationalize the auto industry so business losses will be borne by the taxpayer rather than the shareholders.

The socialist goal is to destroy capitalism and replace it with a socialist society.  A perfect prototype of that society would be a “worker owned and managed” auto industry in Detroit.  That is the most probable outcome of the current financial crisis in the industry if we continue on the present path.

Can’t We Just Jail Them All?

minute-man-2-lithoIf Hank Paulson, Ben Bernanke, Nancy Pelosi, George Bush and the other principals in the government’s attempted bailouts of our struggling economy were employed in the private sector they would be in danger of criminal indictment. The charges would be conspiracy to commit fraud and embezzlement.

Perhaps the most culpable of these would be Fed Chairman, Bernanke and Secretary of Treasury, Paulson.  It is alleged that the Fed has pumped some two trillion dollars into the efforts to reverse the current recession.  In opposition to Congress and in violation of the Constitution they have refused to reveal where the money went and who were the recipients.

Moreover, when they went to Capital Hill to lobby for the $700 billion bailout they agreed to use the funds to purchase toxic assets from banks and other mortgage holders.  After being granted authorization to use the funds, Paulson announced the funds would not be used for that purpose but rather to buy equity in financial institutions.  The acquisition of money through deceptive means is fraud, and the misuse of funds entrusted to someone for their own ends is embezzlement.

Article I, Section 9 of the Constitution requires that all money withdrawn from the treasury must be appropriated by law and an accounting of its expenditure must be published.  Members of Congress who voted for the bailout in order to curry favor with their constituents engaged in a misuse of treasury funds for purposes not authorized by the Constitution.

Appropriating public funds for the use of private businesses is not one of the enumerated powers.  Neither is it supported in this case by the doctrine of implied powers or the “necessary and proper” clause found in Constitution 1.8.19. To argue that the authority is given in Congress’s power to “regulate commerce” represents a  misunderstanding of the meaning of the phrase as used by the framers and understood by the citizens of the states who ratified the constitution.

“Commerce” referred to trade—the buying and selling of goods—not to the production or financing of those goods. It may be argued that finance is an ancillary part of commerce, or that it substantially affects the ability of commerce to occur.  Justice Clarence Thomas wrote a concurring opinion in 1995 in the case of “The United States vs. Lopez” in which he discussed this perversion of constitutional doctrine.

“… We [the court] have said that Congress may regulate not only “Commerce . . . among the several states,” U.S. Const., Art. I, §8, cl. 3, but also anything that has a “substantial effect” on such commerce. This test, if taken to its logical extreme, would give Congress a “police power” over all aspects of American life….”

“….Indeed, if a “substantial effects” test can be appended to the Commerce Clause, why not to every other power of the Federal Government? There is no reason for singling out the Commerce Clause for special treatment. Accordingly, Congress could regulate all matters that “substantially affect” the Army and Navy, bankruptcies, tax collection, expenditures, and so on. In that case, the clauses of §8 all mutually overlap, something we can assume the Founding Fathers never intended…”

The original intent of the bailout was to shore up the housing market, stabilizing it so that it would not adversely affect the rest of the economy.  Home ownership may have been a goal of the “New Deal” or the “Great Society” but it is clearly not a matter sanctioned by the Constitution for the federal government, and is not remotely related to the commerce clause.

The Commerce Clause gives Congress the Power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” While the buying and selling of a home might be commerce it is certainly not “interstate commerce” since it cannot be transported from one state to another.  Neither would the fact that a purchaser might be a resident of one state and purchase a home located in another make it an interstate commerce transaction in constitutional terms.

The fact that the precedent of case law over the past hundred or two hundred years might support such a position does not alter the constraints on government established by the Constitution.  I am reminded of the old theological question, “how long does a heresy have to be repeated before it becomes truth?”

Memo to President Bush

Please go over and wake up Henry Paulson.

Pinch him!

Slap him!

Do whatever you must, BUT WAKE HIM UP!

When you have his attention, please remind him that his name is Henry, not Hugo.

He is in America, not Venezuela.

We have a Constitution, although those of you in Washington seem to have momentarily forgotten this fact.

Article I, Section 9 of that Constitution says, in easy to understand language:


I frankly do not understand what is so difficult to understand about this.  I was surprised to hear on the news Sunday afternoon that Henry had decided to give the big three automakers $25 billion in exchange for equity in their companies.  Just a few days ago I heard Nancy Pelosi declare no funds would be given the automakers until they produced a business plan suitable to Congress.  Did I miss something?  Did Congress have a rare weekend session?

Even if they did, I cannot find anything in my copy of the Constitution authorizing Congress to use Treasury funds to purchase private enterprises or to shore up failing ones.

Article I, Section 8 makes it clear what tax money is allowed to be used for.  PURCHASING EQUITY POSITIONS IN PRIVATE COMPANIES, INCLUDING BANKS AND CAR COMPANIES, IS NOT ONE OF THEM.

Is everyone on Capital Hill off their meds? Or, am I losing my mind.  At this point I am not sure which.  Please find a copy of the Constitution and you and Henry retire to a quiet corner where you can read it together.  You might also invite Nancy and Harry to join you.  We would all benefit from your doing so.