As mentioned in an earlier post, Congressman Ron Paul has introduced legislation (HR 1207) to demand an audit of the Federal Reserve System. No body or institution in the world has so much power over our economy as does the Federal Reserve System. Yet, this private institution has virtually no accountability to the general public.
As of latest reporting, HR 1207 has 190 co-sponsors. This includes a fair number of Democrats. Among Alabama Congressmen, HR 1207 is co-sponsored by Congressmen Mike Rogers (3rd district), Robert Aderholt (4th district, and Spencer Bachus (6th district). Pressure
This past week, the US Senate failed to concur with the House of Representatives in passing a bailout package for the nation’s large domestic automakers. This bailout had the support of the Democratic leadership in Congress as well as the Bush White House. Already, doomsayers are bemoaning this lack of financial infusion from an already depleted federal budget. However, I applaud this decision as a victory for principle over pragmatism. Hoping that conservatives will learn from this effort to continue enlarging government, consider some lessons from the bailout controversy.
Displaying both passion and courage, GOP Senator Richard Shelby of Alabama has been leading the charge against a taxpayer bailout of the automobile industry. With pressure from both corporate interests and the White House, Senator Shelby is standing firm and leading the opposition to this big-government bailout.
Shelby won his seat in the US Senate in 1986 as a Democrat, defeating Republican incumbent Jeremiah Denton. In his initial Senate campaign, Shelby had maximum support from organized labor, groups now clamoring for attention in the bailout legislation. Shelby’s home state of Alabama is home to major Toyota, Honda, and Mercedes plants. Yet, this Senator has chosen to face the special interests and stand for principle in opposing a giant step toward socialism.
Sen. Richard Shelby (R-AL) has placed holds on some Obama Administration appointments because he wants his pork:
Alabama Republican Sen. Richard Shelby has placed a unilateral hold on all of President Barack Obama’s executive branch nominees in an apparent protest over home state concerns.
Shelby is frustrated over the Pentagon’s bidding process for air-to-air refueling tankers, which could lead to the creation of jobs in Mobile, Ala. And spokesman Jonathan Graffeo said in a statement the senator is also “deeply concerned” that the administration “will not release” funds already appropriated for a Terrorist Explosive Device Analytical Center to be built in Alabama.
“If this administration were as worried about hunting down terrorists as it is about the confirmation of low-level political nominations, America would be a safer place,” Graffeo said.
Isn’t that called extortion here in the real world? No matter, I guess, they don’t play by our rules anyway.
To say that the trillion dollar plus bailout about to be rammed through is wildly unpopular is a gross understatement. What’s surprising is that the conglomerate of critics is not limited to libertarians or fiscal conservatives or even pragmatists, but includes individuals who are quasi-socialists and/or typical Bush Admistration loyalists.
Luigi Zingales, a Professor at the University of Chicago School of Business-
“For somebody like me who believes strongly in the free market system, the most serious risk of the current situation is that the interest of a few financiers will undermine the fundamental workings of the capitalist system. The time has come to save capitalism from the capitalists.”
Nouriel Roubini, an economist at New York University-
President Bush is “asking for a huge amount of power,” - “He’s saying, ‘Trust me, I’m going to do it right if you give me absolute control.’ This is not a monarchy.
Paul Krugman, the Princeton University economist and liberal columnist for The New York Times-
“I hate to say this, but looking at the plan as leaked, I have to say no deal,” he wrote on his blog at 4:46 p.m. Saturday. “Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets.”
Yves Smith, contributor to the finance blog Naked Capitalism-
“Given that continuing to buy U.S. assets will come under increasingly harsh scrutiny overseas, the U.S. needs to bend over backwards to devise a plan that at least looks credible in terms of directing the funds that come from taxpayers and lenders to their highest and best uses and implementing reforms that will restore active and prudent oversight of financial firms,” - “The administration’s demand for a free pass, even if Congress unwisely goes along, is likely to backfire with our foreign creditors.”
Gregory Mankiw, former chairman of Bush’s Council of Economic Advisers-
“Has more money ever been given with fewer restrictions on how it is used? Ever?”
Sen. Richard Shelby (R- AL), ranking Republican on the Banking Committee, called it-
“the mother of all bailouts. I figure it will be at least half a trillion. But if you look at what the Fed has already done [by rescuing insurance giant AIG], and the extension of power to Treasury to deal with Fannie Mae and Freddie Mac, I believe we’re talking about a trillion dollars. [The Bush Administration] lurching from one crisis to another. They don’t seem to have a superplan to deal with this. … We want to see the plan. This is not a done deal yet. But we know there’s crisis, there’s stress, in the financial markets that we haven’t seen in, say, 70 years.”
Sen. Jim DeMint (R-SC), a member of the Joint Economic Committee-
“What is missing from it and from the recent string of bailouts is a commitment to return to a free enterprise economy. … What we need now is not what could be nearly a trillion dollars in new taxpayer bailouts but pro-growth policies that allow our markets to correct and start growing again.”
Sen. John McCain (R-AZ)-
“I am greatly concerned that the plan gives a single individual the unprecedented power to spend $1 trillion — trillion — dollars without any meaningful accountability. Never before in the history of our nation has so much power and money been concentrated in the hands of one person. This arrangement makes me deeply uncomfortable.”
Rep. Scott Garrett (R-NJ)-
“In the short term, I have great concerns about spending taxpayer money with limited accountability for these actions,” Garrett said. “In the long term, I am very concerned about the inflationary pressures that will arise from this action.”
Michelle Malkin, conservative author and columnist-
“Both parties in Washington are about to screw us over on an unprecedented scale. They are threatening us with fiscal apocalypse if we don’t fork over $700 billion to Treasury Secretary Henry Paulson and allow him to dole it out to whomever he chooses in whatever amount he chooses — without public input or recourse. They are rushing like mad to cram this Mother of All Bailouts down our throats in the next 72-96 hours. And right there in the text of the proposal is this naked power grab: “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.”