Senator Inhofe and the Year America Was Suckered

Dan Friedman just sent me Jim Myers's excellent Tulsa World article which quotes Senator Jim Inhofe as complaining that:

"Congress was not told the truth about the bailout of the nation's financial system and should take back what is left of the $700 billion 'blank check' it gave the Bush administration.

"'It is just outrageous that the American people don't know that Congress doesn't know how much money he (Treasury Secretary Henry Paulson) has given away to anyone,' the Oklahoma Republican told the Tulsa World.

"'It could be to his friends. It could be to anybody else. We don't know. There is no way of knowing.'"

I teach classes called "Conflict and Negotiation" and "Managerial Skills" in which I go over how to identify and avoid confidence schemes.

This has been a year of confidence. First, we had the Obama campaign arguing that we should take Obama's bona fides on trust and that he was serious about his slogan "change" even though he and his pissant propagandists at the New York Times had no clue as to what it meant.

Then, we had Hank Paulson and the Bush administration tell the American public that a "bailout" was necessary and that Congress needed to give Paulson $750 billion, but no one could quite explain for what or why.

Senator Inhofe raises some red flags that are characteristic of con men's tactics. First, one tactic is to say that the deal needs to be made right away. Paulson did that. Second, there's an avoidance of details, or blithe explanations of the details. "Change". "Crisis". Who needs to know why? Third, inevitably the con artist calls for "trust". "Trust me, I'm for change." "Trust me, I'm an American citizen." "Trust me, there's a financial crisis."

Jim Myers does a good reporting job but why does Senator Inhofe remind me of Jim Chanos, the hedge fund investor who sold Enron short in 2000, a year before the firm collapsed, when everyone, including the editors of the Times and five casewriters at the Harvard Business School were touting it as the most "creative" company?

Gerald P. O'Driscoll, Jr. Advocates Gold Standard

Gerald P. O'Driscoll, Jr., previously of the Federal Reserve Bank of St. Louis and now of the Cato Institute, has an excellent article in today's Wall Street Journal. O'Driscoll writes:

"Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank because it forces it to acquire commodity reserves in order to increase the money supply. Today the government can inflate asset bubbles without paying a cost for it because the currency isn't linked to the price of a commodity."

The Federal Reserve Bank has become a barbaric relic. It is time for Americans to think about adopting a civilized alternative to the Fed's barbarism: a gold standard.

Mr. Crum Goes to The Supreme Court

Jim Crum has written the following letter to each of the US Supreme Court justices: Scalia, Souter, Thomas, Roberts, Ginsburg, Stevens, Breyer, Kennedy, and Alto:

The Honorable Associate Justice Antonin Scalia
United States Supreme Court
One First Street, N.E.,
Washington, D.C. 20543

Re: Mr. Obama Birth Certificate

Justice Scalia:

By now you must be aware of the various litigants and the constitutional issues surrounding their requests to secure a valid and authentic long form birth certificate for Mr. Obama.

The long form birth certificate is an exact photocopy of the original document that was prepared by the hospital or the doctor at the time of the child’s birth. It typically includes some very specific information such as the birth place, the doctors’ names, the name of the parent(s), as well as residence. It will usually include a signature of the parent and the physician.

It would appear that instead of resolving the matter by furnishing the authentic document for review, the defendant has chosen to obstruct the matter with legal maneuver and judicial ju-jitsu. Perhaps some might see this approach as appropriate, yet candidly it does not serve:

• The defendant whose eligibility and qualifications may be unfairly besmirched
• The electors who may unknowingly certify an ineligible candidate
• The Republic whose laws must be followed
• The nation who must come to consensus over the candidates legitimacy to serve
• The Supreme Court whose powers will be eroded if they refuse to act quickly

I make no determination to the truthfulness of the allegations being pressed to your body for review. Neither should yourselves, or anyone else, until such a time as the documents are secured for inspection, authenticated, and made public.

It is time to do the job for which you were appointed. Specifically, factually determine Mr. Obama’s eligibility to serve the office as described in the US Constitution.

Sincerely,


Jim Crum

$350 Billion of Paulson Bailout for Foreign Investors

Contrairimairi has forwarded this video from Count Us Out. Based on C-SPAN and CNBC clips, Count us Out says that the bailout was not targeted to help the US economy but rather to in large part bail out foreign investors, specifically in China, Britain, Australia and Germany. It seems to me that decades of public indifference to Federal Reserve policy on the false assumption that monetary issues are technical economics rather than political may be coming to an end. Wall Street is twirling the American dog around by its tail, and the public is going be yelping about how much trusting the media's Fed apologists and the Wall Street apologia that has spewed from Ivy League universities has cost it. Americans have put up with declining real wages,caused by the Fed's inflation, for three decades. Now they are witnessing the financial system's destruction of the real economy.

What seems to me to have happened is that sub-prime mortgages were packaged and sold to foreign dollar holders. The sellers, Wall Street, defrauded the foreign investors. The foreign investors are now ready to dump these assets. They may also be threatening to retaliate by broader dumping of dollars.

The investors in other countries may not be all that greedy, which is what Count Us Out argues, but just suckers to Wall Street's fraud. Let's see what the alternatives are.

1. The bailout bill is not implemented. Foreign debt holders sell US securities on the market. They are angry because they've been cheated. The dollar plummets. Perhaps they retaliate against Wall Street and the dollar in other ways. The stock market falls. US taxpayers aren't on the hook for the bailout money. The dollar may cease to be the world's currency.

2. The bailout bill is implemented. Foreign debt holders sell the US securities to the government. The dollar plummets. Foreign investors are not angry and do not retaliate against Wall Street and the dollar. The stock market holds firm or goes up. US taxpayers are on the hook for the bailout money. The dollar continues as the world's currency.

Either way the dollar plummets. With no bailout, a falling stock market would hurt American stockholders, but a broader swathe of taxpayers would be relieved of the cost of the bailout. The dollar might cease to be the world's currency now rather than later. This would hurt consumers in the short run, but impose discipline on the economy in the long run.

Contrairimairi, like many Americans, is upset. She wrote this to me in an e-mail:

>"I don't know about anyone else, but if you thought I was angry before, you ain't seen nothin' yet! The handwriting is on the wall, and I have read it. I am going to start a new round of DEMANDS to Congress. First, STOP this bailout! NOW! Second, BEGIN PROSECUTIONS! I want Barney Frank, Nancy Pelosi, Chris Dodd, Barack Obama, Paulson, Bernahnke, Kashkari, Chris Cox, and anyone else involved in this mess BEHIND BARS! That would include, of course, all their "inside friends", Raines, Johnson, Pritzker, and all the others whose names escape me at the moment, because their are just too %*#@ many of them!

>I think the "Call to Arms" has already passed, and we are smack dab in the middle of this thing. I am gearing up for a whole new round of "taking officials to task" for all that is going on. We formed a revolution 200 odd years ago against taxation without representation. Well, guess what? We have just been hit with the LARGEST "Taxation without Representation" in history. We are the ones who will foot this bill. The American people TOLD our legislators to vote "NO!" on this bailout and they did NOT listen. We were NOT represented! Few of the representatives elected "For the People" remembered us, our children, or our grand children. They said "NO!" to performing their sworn duty to uphold the Constitution. Anyone who thinks the American People should not revolt AGAIN, has their head stuck firmly either in the sand, or somewhere else where the sun can't find it! I'm off to start making my demands, hope everyone else will jump on board!

>PLEASE watch the videos included in this info [see above]. You won't need to heat your house if it's cold where you are, this will BOIL your blood!