William ‘BJ’ Lawson
Recent Posts From William 'BJ' Lawson
B.J. Lawson is a candidate for the House of Representatives in North Carolina’s Fourth District. To learn more about his candidacy, please visit www.lawsonforcongress.com.
We’re being treated to legislative bread and circuses with the recently-passed financial “reform” bill. Putting aside the irony of a “Consumer Protection Bureau” being housed in the Federal Reserve, whose shareholders are the largest banks while also being tasked with regulating the largest banks… we’re being distracted by these “reform” efforts in the face of the largest looting operation in American history.
Here’s how it works: in our world of “global ZIRP” (zero interest rate policy), banks get to borrow from the Federal Reserve at essentially zero interest. But instead of making loans to Main Street based upon those borrowings, banks are buying Treasury debt hand over fist to finance our massive deficit spending while pocketing 2-4% interest on the backs of American taxpayers.
Wouldn’t you like the opportunity to borrow at zero and lend at 3% to the federal government? Sure beats working for a living.
Henry Blodget wrote two excellent articles on the racket a few months ago: How to Make the World’s Easiest $1 Billion, and The Fed’s “Exit Plan” is Just Another Secret Gift to Wall Street.
Herein lies a fundamental problem with our financial system: the federal government cannot “regulate” the banks. The federal government needs the banks, especially as our government debt becomes less attractive to foreign lenders.
I was honored to be invited to speak at the Raleigh, North Carolina Tax Day Tea Party Wednesday evening. I’m a poor judge of crowds, but estimates ranged from 2,000 to 7,000 from various sources — the east lawn of the old capitol downtown was completely full.
This event was the perfect opportunity to capture the transpartisan frustration surrounding our economic malaise, and the immense conflicts of interest that drive government efforts at “recovery.”
Chris Martenson recently explained the root of our shared frustrations. America is literally being looted:
Whom do you trust?
It’s an open question that I’ve been pondering for the past several weeks. The markets have been asking this question, as well — despite billions of additional borrowed money to bail out Citibank and protect AIG’s trading partners, we keep sliding to new lows as debt deflation continues.
Our Treasury Secretary, Turbo Tax Tim Geithner, sat in front of the Ways and Means Committee Tuesday to assure our representatives that his actions, and Obama’s budget proposal, are absolutely necessary to restore our economy. His favorite quote when confronted by pointed questions or painful anecdotes from our current crisis was, “That’s exactly why we need to…” [bail out AIG/increase the TARP/create the TALF/embrace a budget that forecasts a $1.75 trillion deficit].
Obama’s address Tuesday evening contained a fascinating lesson in economics and monetary policy for the American public. Let’s review:
So the recovery plan we passed is the first step in getting our economy back on track. But it is just the first step. Because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.
I want to speak plainly and candidly about this issue tonight, because every American should know that it directly affects you and your family’s well-being. You should also know that the money you’ve deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system. That is not the source of concern.
Tonight’s New York Times trumpets our new Treasury Secretary’s heroic efforts to restore trust and transparency to our bailout-ridden financial system:
WASHINGTON — The new Treasury secretary, Timothy F. Geithner, announced on Tuesday that he would crack down on lobbying to influence the $700 billion financial bailout program by companies that are receiving billions in taxpayer money.
Mr. Geithner, who was confirmed on Monday, also said he would set new limits intended to prevent political interference with decisions about which companies received bailout money.
When we substitute influence peddling for the Rule of Law, the value of Washington lobbyists becomes evident. As today’s Wall Street Journal notes, the return on investment is huge:
General Motors Corp. spent $3.3 million on lobbying in the fourth quarter of 2008, a period that coincides with the government committing $13.4 billion to the ailing auto maker under the Treasury’s Troubled Asset Relief Program. In all of 2008, GM spent $13.1 million on lobbying, down from $14.3 million in 2007. GM’s reported lobbying expenses for 2008 were only slightly less than combined spending by Ford Motor Co. and Chrysler LLC.
As various tax-related mail begins to appear in the mailboxes of hardworking Americans across the country, it’s instructive for all of us to reflect on why we carry the burden of our government every April.
Take this morning, for instance. We can credit the “ingenuity of the markets”, and specifically the ingenuity of John Thain, for moving annual executive bonus payments by Merrill Lynch up by a month last November, thus disbursing $15 billion in executive bonuses just before closing Merrill’s acquisition by Bank of America. Fast forward a few months, and the United States taxpayer just gave Bank of America another $20 billion in newly-borrowed funds to put a band-aid on mortar wounds in Merrill Lynch’s balance sheet.
Despite a hard-fought campaign, and despite the help of thousands of people across our country, our Congressional campaign in North Carolina’s 4th District suffered a decisive defeat. We received many compliments on our campaign, which featured a well-attended debate at UNC, a brief but focused media campaign (see Your Money at Work, and Your Money at Work Part 2), fifty thousand copies of our United States Constitution, and hundreds of great volunteers across the district engaging voters at the polls. While compliments don’t win elections, I was proud to represent the cause of a Constitutional federal government, and principled government that upholds the rights of individual Americans.
I’m grateful that Dr. Tom DiLorenzo, professor of economics at Loyola College, took the time to write a rebuttal to an inexplicably ignorant hit-piece recently published in the Wall Street Journal entitled “A Short Banking History of the United States.”
The author of this article, Mr. John Steele Gordon, makes a number of spurious claims in an attempt to discredit the economic philosophy of sound money controlled by the people, and defend Alexander Hamilton’s loyalty to banking interests in the drive to create a private central bank to own our money supply.
We are making this happen, and this last week of early voting will be critical.
First, thank you to everyone who contributed to take our campaign to this level, and signed on to help call voters and raise needed funds.
However, we’re at a critical decision point. The Constitutions have been going faster than expected at the polls, and we have a fantastic new mailer that needs to go out by Tuesday.