Rush Limbaugh Says The Banks Were Victims, The Bailouts A Success!

And the Tea Party got all hot and bothered over what, exactly?

Santelli's rant against the $75 billion mortgage bailout program called HAMP on CNBC? Noboby heard it!

The interventions bailing out private corporations like GM, Chrysler, and AIG, etc? Why, totally meaningless! Didn't happen!

This gag never appeared anywhere:

Nearly 400 failed banks haven't failed.

The FDIC hasn't had to pay $80 billion because of it.

1000 more with $400 billion in assets aren't really in danger.

Taxpayers aren't on the hook for $160 billion and rising for Fannie Mae and Freddie Mac. 

$10 trillion in taxpayer funds weren't really lent to every Tom, Dick and Hairy Bastard in the world at rock-bottom rates by the Federal Reserve!

The New York Times is simply mistaken that TARP will end up costing the taxpayers $37 billion. The CBO estimate of $25 billion is also quite simply wrong.

Partial transcript here:

RUSH: Will in Amanda, Ohio. You're up first. Great to have you on the EIB Network. Hello.

CALLER: Hey thanks, Rush. Hey, don't you think the one common denominator between the Tea Party and the protesters on Wall Street is a lack of justice? And what I mean by that is the lack of criminal prosecution from anybody from Fannie Mae and Freddie Mac, Wall Street, the banking industry, or even our own government officials.

RUSH: Um, okay --

CALLER: Not one prosecution, Rush.

RUSH: You want prosecution? Oh, "not one." I'm trying to understand. What's the correlation to the Tea Party?

CALLER: Well, the Tea Party gathered great strength after the bailouts that they tried to stop, and I think without the prosecution of anybody for crimes that have brought this country to its knees --

RUSH: Okay, name for me a crime and who you think should be prosecuted. I'm not disagreeing, I just want to know. Obama was asked this question today.

CALLER: Rush.

RUSH: Somebody asked him today, "How come there haven't been any prosecutions?" Who? And for what?

CALLER: I have to untie the other half of your brain for this one. Think about Fannie Mae and Freddie Mac.

RUSH: Okay, when I think Fannie Mae and Freddie Mac I think Barney Frank and Chris Dodd.

CALLER: Absolutely.

RUSH: Okay.

CALLER: But look at the collusion that's taken place between Wall Street and the banking industry and selling the mortgages -- or giving mortgages to anybody -- 'cause we know we can sell 'em off over here and we don't care if they're qualified or not.

RUSH: All right.

CALLER: Do you think there was a lack of fiduciary responsibility from a lot of people?

RUSH: No! I think there was fear of government.

CALLER: The what?

RUSH: I think there was fear of government. You talk about all these mortgage-related projects. Why did they exist?

CALLER: That doesn't justify crime.

RUSH: I'm not saying it does. No, no, no, no. Wait a minute. (sigh) I'm not trying to justify crime, but when you have the... I don't know. ...

Now, it's risky saying this because I sound like I'm coming to the defense of bankers. ...

They were forced to accept the bailout. The banks have paid back their bailouts with interest. The government has made a profit from the bailouts.

A Libertarian Defends Local Bankers

An analyst of the banks and an increasingly visible commentator on the foreclosure mess, R. Christopher Whalen puts in a good word for local bankers on his blog at Reuters.com:

The bad guys in the housing bust are not the banks who must foreclose on homes, but the politicians in both political parties who used reckless housing policies to further their personal interests. This is a bipartisan national scandal. Barney Frank, Chris Dodd, Phil Graham, Alan Greenspan and their contemporaries are the authors of our collective misery, not the local banker who must clean up the mess created by government intervention in the housing market.

Read the rest here.

Tim Geithner and Ben Bernanke Usurped The Power Of The U.S. House Of Representatives

So why aren't they in jail? They illegally bought trash loans and credit default swaps with taxpayer money and without congressional authorization. The Fed is permitted to buy only government-backed securities. If government disobeys the law, what's treason? Why should Joe American obey any of the laws of this land when its highest ranking officials don't? Aren't these "high crimes and misdemeanors"? Karl Denninger wants to know, here:

THE FED ADMITS TO BREAKING THE LAW

Now how long will it be before something is done about it?

April 1 (Bloomberg) -- After months of litigation and political scrutiny, the Federal Reserve yesterday ended a policy of secrecy over its Bear Stearns Cos. bailout.

In a 4:30 p.m. announcement in a week of congressional recess and religious holidays, the central bank released details of securities bought to aid Bear Stearns’s takeover by JPMorgan Chase & Co. Bloomberg News sued the Fed for that information.

The problem is this: The Fed is not authorized to BUY anything other than those securities that have the full faith and credit of The United States.

In addition Ben Bernanke has repeatedly claimed that these deals would not cost anyone money. But the current value looks differently:

Assets in Maiden Lane II totaled $34.8 billion, according to the Fed, which set their current market value in its weekly balance sheet at $15.3 billion. That means Maiden Lane II assets are worth 44 cents on the dollar, or 44 percent of their face value, according to the Fed.

Maiden Lane III, which has $56 billion of assets at face value, is worth $22.1 billion, or 39 cents on the dollar, according to the Fed’s weekly balance sheet. A similar calculation for the Bear Stearns portfolio couldn’t be made because of outstanding derivatives trades.

In other words, they have lost more than half of their value.

This was and remains a blatantly unlawful activity.

The Fed has effectively usurped Article 1 Section 7 of The Constituion which reads in part:

All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

The Fed effectively appropriated taxpayer funds without authorization of Congress. At the time these facilities were put in place neither TARP or any other Congressional authorization existed for them to do so, and to date no bill has been put through Congress authorizing the expenditure of taxpayer funds, either through putting them at risk or via outright expense, for this purpose.

Nor does it stop with a "mere" Constitutional violation - The Federal Reserve Act's Sections 13 and 14 do not permit Fed asset purchases except, once again, for items carrying "full faith and credit" guarantees. Credit-default swaps and trash mortgages most certainly do not meet these qualifications.

I know I've harped on this for more than two years, but here we have a raw admission of exactly what was done - and there is simply no way to construe any of it in a light that conforms with either The Constitution or black-letter statutory law.

What's worse is that Tim Geithner, head of the NY Fed at the time, was very much involved in this - that is, he in effect personally, along with Ben Bernanke, usurped the power of the United States House.

The Fed has spent two years trying to hide this from the public and Congress. It has fought off both Congressional demands for disclosure and multiple FOIA lawsuits, the latter of which has resulted in a series of adverse rulings (and, it appears, was ultimately going to force disclosure anyway.)

These actions are unacceptable but promising "never to do that again" is insufficient. In a Representative Republic where the rule of law is supposed to be paramount - that is, where we do not crown Kings and relegate everyone else to the status of knaves, unlawful actions such as this demand that strong and unmistakable sanction also be applied to all wrongdoers in addition to protection against future abuse.

In this case this means that both Geithner and Bernanke must go - for starters.

Amending The Federal Reserve Act of 1913 (as Chris Dodd has proposed to prevent future lending bailouts) is not sufficient in that The Fed did not lend in this case, it purchased, and by buying what we now know were trash loans it violated the black letter of existing law.

There is only one effective remedy for an institution that has proved that it will not abide the law: it must be stripped of all authority that has been in the past and can be in the future abused.

This means that The Fed, if we are to keep it at all, must be relegated to a body that only practices and provides monetary policy - nothing more or less - and that all monetary operations must be performed openly, transparently, and within those constraints.

We cannot have a republic where an unelected body is left free to violate The Constitution with wild abandon and those acts are then allowed to stand.

One final thought: If the individuals responsible for this blatant black-letter violation of the law do not face meaningful sanction for these acts, and neither does The Fed as an institution, can you fine folks over at The Executive, Judiciary and Legislative branches of our government please explain to us ordinary Americans why we should obey any of the laws of this land when you will not enforce the laws that already exist?

Health Bills Fail Five Constitutionality Tests

ObamaCare vs. the Constitution

By BETSY MCCAUGHEY January 6, 2010

The health bills in Congress rob you of your constitutional rights. Here are five provisions (of many) that fail the constitutionality test and reveal Congress's disrespect for the public:

* Section 3403 of the Senate health bill, establishing a commission to cut Medicare spending, says the law can't be changed or repealed in the future. This whopper shows that Congress thinks its work should be set in stone. Wrong. The people always have the right to elect a new Congress to change or repeal what a previous Congress has done.

* A Senate health-bill amendment mysteriously allocates $100 million to an unnamed facility that "shall be affiliated with an academic health center at a public research university in the United States that contains a state's sole public academic medical and dental school" (Sec. 10502, p. 328-329). Why not name the facility?

This pork deal was arranged by Sen. Chris Dodd for the University of Connecticut Health Center, although 11 hospitals in the nation technically meet these specifications. If Congress wrote the provision in Polish or Russian to keep the public in the dark, it would be unconstitutional. The language is a deception. The fact that legislators commonly do this makes it more damaging, not less so.

* The bills require you to enroll in a "qualified health plan," whether you want it or not. Forcing people to buy insurance obviously reduces the number of uninsured. But Congress doesn't have the authority to force people to buy a product.

Sen. Orin Hatch (R-Nev.) said on the Senate floor, "If Congress may require individuals to purchase a particular good or service . . . We could simply require that Americans buy certain cars . . . for that matter, we could attack the problem of obesity by requiring Americans to buy fruits and vegetables."

Some Congress members claim the "general welfare clause" of the Constitution empowers them to impose a mandate. But they're taking the phrase out of context. The Constitution gives Congress power to tax and spend for the general welfare, but not to make other kinds of laws for the general welfare.

The Senate bill (pages 320-324) claims the "interstate commerce" clause of the Constitution gives Congress this authority. But for half a century, states have regulated health insurance. In fact, individuals are barred from buying insurance in any state except where they live, the antithesis of interstate commerce.

Congressional majorities have frequently resorted to the commerce clause to justify their lawmaking. In FDR's first term, Congress cited it to pass the National Industrial Recovery Act, which gave the federal government power to micromanage local businesses, setting wages and hours and even barring customers from selecting their live chickens at the butcher. Two Brooklyn brothers, owners of Schechter Poultry Corp., a kosher chicken business, challenged that interference. In 1935, the US Supreme Court ruled the NIRA unconstitutional.

In 1995, the high court again admonished Congress against using the commerce clause as a basis for expanded lawmaking, even when the purpose is as worthy as keeping handguns out of a school zone (US v. Lopez). The court ruled that Congress must stick to its enumerated powers and leave states to police school zones (and, perhaps, mandate health insurance).

* Never before has the federal government intruded into decisions made by doctors for privately insured patients, except on narrow issues such as drug safety. Nothing in the Constitution permits it. But the Senate bill makes you enroll in a plan and then says that only doctors who do what the government dictates can be paid by your plan.

"Qualified plans" can contract only with a doctor who "implements such mechanisms to improve health-care quality as the [current or future] secretary [of Health and Human Services] may by regulation require" (Sec. 1311, p. 148-49). That covers all of medicine, from heart care to child birth, stents to mammograms.

* Finally, the "takings clause" of the Fifth Amendment bars government from taking your property without compensation. It should protect everyone, no matter how unpopular -- even insurance companies, but Congress ignored it in writing the health bill. The Senate version goes beyond reining in insurance-company abuses, a just cause, and actually caps insurance-company profit margins at well below current levels, robbing shareholders.

Next year, Congress could impose similar caps on profit margins of bodegas, pizzerias and grocers, by arguing that food -- also a necessity -- is too expensive. Your business could be next.

In 2010, ordinary citizens will have to stand up for their constitutional rights, just as the Schechter brothers did 75 years ago. Congress members swear to uphold the Constitution, but it appears many are ignorant of what it says. They should be mandated to take a course, as pilots and doctors are. Congress needs to be reminded that the Constitution defines and limits its powers.

Betsy McCaughey, a former New York lieutenant governor, is author of "Government by Choice: Inventing the United States Constitution."

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