The Northern Review

We hear Representatives who voted against the Money Lender Bailout are now going to change their vote and vote in favor of the Bailout because it has a host of “tax earmarks” or rather an “earmark” they like.  If this is true, what it says is that some of our Representatives are “for sale.”  Fin de Siecle America.  We are going in the wrong direction.

The Casino Lenders Bailout of 2008 will not work. It cannot work. It is based upon a false premise. The premise is that bad debt is a governmental asset. Is this in any way reasonable?  

It will also fail because the bad debt the government is about to buy is just the tip of the iceberg. Just look at the millions of new cars and trucks on the streets — I would venture to say 90% are financed. Such debt must at least be a trillion. Most of the people are probably having a hard time paying the debts.

Now add all the consumer debt. A trillion here, a trillion there, and you have a real problem.

America has spent its future. It would be far better to let the market work its way out of this. Our economy has been one of reckless profligacy. Of necessity, it will come to an end. The bailout is dead in the details. There is no essential truth in the legislation.

Not going to be a constitutional law commentator or reviewer, but one must wonder this:  Where in the constitution of the United States did the people and the states authorize the federal government to use taxpayer money to buy assets from money lenders?  At the time of the making of the constitution is it possible that the government was buying bad assets from money lenders?  Where in the constitution is it said that the federal government had the authority to use taxpayer money to encourage money lenders to loan money?  Was the federal government doing this at the time of the ratification of the constitution?

We all know the answers to these questions.  So where does Congress find its authority within the law of the constitition to provide for the bailout?

The proponents of the bailout say without it money lenders will not lend money.  We are not sure who these money lenders are.  We are even less sure as to who will get the money to be lent.  If America is going to put $700 billion into the financial structure, into the hands of the money lenders, then surely someone would think it important to find out who is going to benefit from all the loans which supposedly will be made because the money lenders will be able to have confidence again and will lend money again.  If your head is spinning, so is everyone else’s.  What we have in the making is the a great, a magnificent, fleecing of the American Taxpayer.

The dilemma we are in is one of the role of money lending in a capitalist free market economy.  The money lenders are saying they can no longer make money on the money they have lent.  They cannot roll it into cash, into new borrowing.  Therefore the money lending gravy train is coming to an end.  They want the borrowers to buy them out so that they can lend more money to a few, a very few, of the borrowers.  The moral hazard question is whether the borrowers are going to yield to this, this graduated fraud, by the money lenders.  They were fought off today, but they will be back.  Even our presidential election candidates are on their side.

There is great moral hazard to the bailout. If our current leaders act to provide what they apparently intend to provide (bill version as of late Sunday evening, Sept. 28, 2008), they will have forever changed America.

We have to have a reasonably free economy. Such freedom presumes that the economy we have is an evolving economy. Economic evolution will not take place if the government engages in the bailout proposed.

The government is blinking.

Moreover, the bailout proposed will engender an utter lack of faith in government and ourselves. What some leaders seek to do has nothing but hazard to it, moral hazard. And, like war, it will present a host of unintended and unforeseen consequences.

It is Sunday in America, September 28, 2008 — The leaders of the Democrat Party of America have their smiling faces all over the American newspaper frontpages.  They are proud because they have reached a Casino Capitalism bad debt bailout.  There is nothing attractive about what the Democrats hope to do on Monday.  There is nothing attractive about what the Republicans hope to do on Monday.

These Democrats, the Repubmocrats, seek to allow the Bush Administration to engage in a massive fraud on the American taxpayer. They have taken over the responsibility for the bailout so that if and when it fails it will be on their shoulders; they are now the champions of a new form of casino capitalism.  And perhaps most important, by their actions and support, they will probably lose control of the Senate and the House at some time in the near a future.  It would not be such a bad loss if the Republicans who seem to be on the same page are also defeated, but they will not be.

We are witnessing the end of America.  We are fiddling while everything is going to hell.

“Government is the problem” so it is said. Now, the same people are saying government is the “answer.” What gives? Our political life is controlled by children. Spoiled children who think the cause of their angst is a parental figure (government) and at the same time think the parental figure (government) can and should save them from their angst. Republicans and Democrats are the same. They want the same thing, the pleasure of children. For a child, pleasure comes from someone big. For the child the solution comes from someone big.We are a nation of victims.

The United States is about to fall apart. Why? What is the basic reason for this? The immediate reason is that “assets” used and leveraged many times over to provide for a (a) consumer economy and a (b) financial economy based on usury, interest payments for the use of money to fund consumption have lost worth. The main basis for the economy is failing. Everything will seemingly come to an end.  

We have had governments intent on satisfying the pleasures sought by consumers and financiers. Everyone has gone on a binge. The binge was justified by the confusion of liberty with desire for consumption based on borrowed funds. Now we are about to pay the price. The parties of no government are coming forward with plans for lots of government. In the next few weeks the United States Government will commence transfer payments from current and future generation tax payers to bail out one side of the economic equation of consumers and financiers — transfer payments to the financiers.

The government is going to buy bad investments made by money lenders. The government will then own the bad investments. It will then sell them if it can. If it cannot it will collect the money coming in on the assets. If the money does not come in the assets will be turned into investments in real estate. The real estate will then be sold. The government stands to lose as much as a trillion dollars. It stands to lose hundred’s of billions. It is said, it had to do this because if it did not money lending would be substantially reduced and the economy, an economy dependent upon credit, would be severely hurt.

However one describes what is about to happen, the basic truth is this: Government is being used to benefit private parties. The broad group of tax payers will be paying for this benefit to private parties. The government will be robbing Peter to pay Paul. One might ask, did the founders provide this power under our constitution? Does the United States constitution allow congress to tax the people to pay money to some of the people?

It is September 19, 2008 in America. What is your congressman doing tonight?