Topic: Economics
Bail Out or Power Grab? The legislation being hammered out in our imperial capital to bail out financial institutions contains a decidedly dictatorial twist.by Darren Wolfe
(libertarian)
Sunday, September 21, 2008
The legislation being hammered out in our imperial capital to bail out financial institutions contains a decidedly dictatorial twist. Section 8 relates to review of the Secretary of the Treasury's decisions. It reads as follows:
"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
(See http://blogs.wsj.com/economics/2008/09/20/treasurys-financial-bailout-proposal-to-congress/ for the full text)
Bottom line, there is no review of the Secretary's decisions. This essentially makes him the USA's financial dictator. Read the whole proposal. The Secretary may issue regulations, enter into contracts, disperse funds, and designate financial agents of the government at his discretion, not subject to review! This delegation of legislative power to the executive branch is contrary to the letter and spirit of the Constitution, and violates the principle of the separation of powers. This kind of rule by decree may fly in Chavez's Venezuela, but it isn't acceptable here.
One is reminded of the warnings of the Founders.
James Madison wrote in Federalist No. 47:
‘‘The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.''
Thomas Paine's observation about government:
"…against this species of despotism, proceeding on through an endless labyrinth of office till the source of it is scarcely perceptible, there is no mode of redress. It strengthens itself by assuming the appearance of duty, and tyrannizes under the pretence of obeying."
The process of turning the USA into a neo-fascist country is nearly complete. The only thing that separates us from out and out fascism is fact that we elect our dictator. The office of the Presidency may have a parade of different occupants, but this doesn't keep us free if they wield dictatorial powers.
This is the culmination of a process begun in the Progressive Era of the late 19th and early 20th centuries . It was then that the idea of federal regulation of the economy began to be implemented. From that era also came the Federal Reserve System, creating a banking cartel. Despite the so-called deregulation of recent years the financial industry remains highly regulated. The mess we're in is a direct result of this intervention. Thank you, progressives, for giving us the regulatory state. Not quite working out the way you thought it would, is it?
The only way out is to implement a system of free banking and private money. We should begin with abolishing the Federal Reserve and repealing the legal tender laws. Then we can repeal the income tax and abolish the IRS. This is an oversimplification that would have to be thoughtfully implemented, but this truly free market approach is the only way to put the economy back on a sound footing.
While it will hurt, we must let the correction run its course. Then we'll have our fundamentals in place (hear that Sen. McCain?) and the economy will recover.
So, no more fascist bail outs!
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The views expressed in this
article are those of Darren Wolfe only and do not represent
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employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.–The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.–The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Mortgage-Related Assets.–The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.–The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.–The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
(2) Secretary.–The term “Secretary” means the Secretary of the Treasury.
(3) United States.–The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.
Posted By: Walt Thiessen
Date: 2008-09-21 18:56:13
This is certainly consistent with the entire history of the Federal Reserve-based banking system. What's interesting about the excellent point you raise is that the use of the government to seize assets for the benefit of the big banks is becoming more and more brazen, with less and less resistance from the public, also consistent with the original intentions of the Fed's founders. In other words, this unilateral, unconstitutional granting of power to a single Executive department head could effectively make future Congressional and Judicial action impossible. This effectively ends the separation of powers defined in constitutional theory.
It raises the possibility that before the final financial catastrophe can arrive, the banking cartel through its Fed cronies may be attempting to set the stage for a complete "rewrite" by executive decree of all laws regarding bank liability. If that happens, the race toward the final demise of the entire financial system would be dramatically hastened, since each step along the way has proven to lead to wilder and wilder speculation by the big bank cartel in their never-ending quest to create an endlessly increasing supply of interest income, with taxpayers picking up the tab whenever those investments go bad.
The stage is set for a gigantic future asset and money grab at taxpayer expense by the big banking cartel that would dwarf anything that has come along previously. Two questions remain unanswered. First, how much longer will foreign investors holding huge dollar-based assets (Treasury bills, Treasury bonds, etc.) continue to hold them without dumping them, and second, how much more will the American taxpayer be willing to pay to continue to bail out the big banking cartel, not just here in America but on a world-wide scale?
Power Grab, and Power Grab without a loophole. A sane government would never attempt to "bail out" a private business. It is just plain wrong, it is contrary to the constitution (my opinion). It is stupid! Opps - I'm ranting.
The government, under Bush, has put the country into enormous debt that our children's, children's children could not pay off. Whole pallets of cash were shipped to Iraq and distributed, as one example. At last our planet's other governments have begin to realize that our American economy is not made of iron - if you know what I mean. These sorts of measures force a few large economy players (banks) into a vast, unchecked influence over our government. No matter WHO we elect, there will be nothing our representitives can do. Because the economic forces will manipulate government, which in turn must pass law to support the economic forces; else the whole thing goes bankrupt, blows up and falls apart on the decision of a few unelected men!
WHO wrote that in the bill? First of all, the bill has not yet passed, so this may not be in there in the final version.
The DEMOCRATS are in control of congress - why would they want Paulson, or any other Republican to have dictatorial powers? Yeah, I understand that they are betting on NObama winning, but there is no guarantee of this.
Is there a way to stop this part of the bill from being passed? Through the courts? The whole point of the separation of powers is to stop this kind of thing. I believe that the Supreme Court WILL be able to overturn this entire bill based on this part alone simply because it is unconstitutional.
While I agree that the bill is unconstitutional the courts won't see it that way. If they did they would have put a stop to many regulatory agencies, like the Secruities Exchange Commision,long ago. They have gone along with this kind of delegation of power.
History of Banking and Money – Tragedy and Hope by Carroll Quigley
Why the Federal Reserve System was approved by Congress 1913
“The powers of financial capitalism had far reaching aims, nothing less than to create a world system of financial control in private hands able to dominate the political systems of each country and the economy of the world as a whole.
This system was to be controlled in a feudalist fashion by central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences.”
Capitalism today is the gradual evolution over some 1000 years through six stages working mainly through cartels and trade agreements to exploit the majority of the people.(Christians please study James very carefully.)The result has been an ongoing struggle of minorities using state to limit political power to defend their privileged position and the majority using the state to control the privileges of the minority.
After 1945, World War II, these dualist struggles dwindled and gave rise to economic and social pluralism.
Capitalism provides powerful incentives to self-interest which has both its strengths and weaknesses.Self-interest is inherently self-pride.Love thy neighbor as they self.
Capitalism because of the profit motive is never seeking to achieve prosperity, high productivity, high consumption, political power and patriotism or even moral goals.Any and all can be both lost and achieved in the pursuit of profits – especially excess profits defined more as greed!
In November 1910, a group of international bankers (7 men) went by train from Brunswick Station in New Jersey to an offshore Island, Jekyll Island, to create what is now our Federal Reserve System.
These seven were:
1)Nelson W. Aldrich, Republican whip in the Senate and Chairman of the National Monetary Commission.
2)Henry P. Davison, Sr. Partner of J.P. Morgan Company.
3)Charles A. Norton, Pres. 1st national Bank of N.Y.
4)A. Piatt Andrew, Assistant Secretary of the Treasury.
5)Frank A. Vanderslip, Pres., National City Bank of N.Y., representing William Rockefeller.
6)Benjamin Strong, head J. P. Morgan Banker Trust Co.
7)Paul M. Warburg, partner Kuhn, Loeb and Company, representing Rothschild’s and Warburg Banks in Europe.
Conservatively they represented 25 percent of the entire wealth of the world.
Their main objective was to create an agreement (cartel) which would first and foremost establish a solid link between the monetarists and U.S. Government (monetary and fiscal policy).
Other objectives:
1.Create an elastic money supply – create money out of nothing.
2.Eliminate competition.
3.Establish a union of all banks in U.S. to control competition - the large International Banks.
4.Stop growing influence of smaller banks to ensure control rests in hands of those persons present at Jekyll Island.
5.Pool small reserves of nations banks so all are motivated to follow same loan to deposit rations – protect from runs on banks.
6.If the system eventually fails, shift burden of losses from owners to taxpayers.
In 1914, one year after passage of the Federal Reserve Act of 1913, Senator Aldrich boasted in a July issue of the Independent that, “Before the passage of this act, the New York bankers could only dominate the reserves of N.Y.Now we are able to dominate the reserves of the entire country.
In 1980 a major change was made which extended the tentacles of the Federal Reserve System to the entire world.
The Monetary Control Act of 1980 authorized Federal Reserve to create money out of nothing for the purpose of lending to foreign governments.Now the Fed’s power extended from the U.S. to any other world government.Since then it has functioned as a Central Bank for the entire world.The first victim of the above act was Panama in the last year of the Carter Administration.
When Ronald Reagan first spoke of a New World Order, he was not whistling Dixie.
In 1985 the Bailout was supplied to Russia, at a time that we condemned their invasion of Afghanistan.My, my! What strange bed fellows.However by 1985, Afghanistan was ancient history to most Americans.
Soon afterward the Soviet Empire mysteriously collapsed.One day here, next day kaput – very convenient!So convenient that it would prompt a thinking person to ask some serious questions.But most Americans in general are very gullible and since America is a great nation under God, why ask questions?
Bob that was a reasoned and well thought out comment. I suggest that an article should follow, so it isn't restricted to the comments section.
Myself, I find this whole banking collaspe very similar to the S&Ls and BCCI, where as you remember we once again foot the bill for bad investments through taxation. Call it a massive corporate welfare scheme.
Posted By: patrick henry
Date: 2008-09-23 05:48:37
I often wonder if this economic "collapse" is not manipulated like the bank runs of 09, 11, 19, the Great Deppression, Asian economic crisis of 97. All of the economic catastrophes have been manipulated by the banking elite to further enslave us.
Take notice to who makes out here, the Executive Branch vastly increases its monopolitive hold on the money supply.
Also note that the Zionist banking elite are making out fat. Millions to leave your failed bank at our expense? Plus these people will be let go with fat severance packages only to be rehired as consultants for the Sec of Treasury on this bail-out project to figure out how to dump all the trash bonds they just aquired from their old company. No doubt the former CEO of Goldman Sachs (read Treasury Secretary Paulson) wants to bail out his buddies with no repercussions.
Get familiar with the 2nd Ammendmant if you know what I mean
Does anyone remember the Savings and Loan scandal of the Reagan Years? According to Project Censored (a Media-research Foundation) Americans have paid hundreds of billions in interest from that bailout. How much are we going to pay for another public bailout brought on by market-based chicanery and fraud? If we're going to bailout someone, we should bailout the home buyers, not banks. This will still help manage this (elite-manufactured) crisis without consolidating all of the relief in the hands of the market manipulators/influence peddlers that bought the law changes that precipitated this crisis. Think about it, people still would have their homes, paid their mortgages, etc. Why do we insist on bailing out the few criminals instead of the many victims of adjustable-rate mortgages? If there is an accurate description of class warfare, giving relief money to investment corporations instead of investing citizens is it.
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